IIF "Global Economic Growth Forecast for This Year Revised Down from 0.4% to -1.5%"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] The Institute of International Finance (IIF) has lowered its global economic growth forecast for this year from 0.4% to -1.5%. Due to the impact of the novel coronavirus disease (COVID-19), the real gross domestic product (GDP) of major countries including the United States, Europe, and Japan has also been adjusted to negative growth. China is also expected to record a growth rate in the 2% range.

In a report released on the 23rd (local time), the IIF explained the reason for the downward revision, stating, "The COVID-19 pandemic, the international oil price war, and worsening credit stress in both advanced and emerging economies are fundamentally changing the situation." Accordingly, the IIF's global economic growth forecast has been lowered three times this month alone, from 2.6% on the 5th to 1.6%, then to 0.4% on the 19th.

The growth forecasts for major regions this year are -2.8% for the United States and -4.7% for the Eurozone (19 countries using the euro), while Japan is expected to record a GDP of -2.6%. Other countries expected to experience negative growth include Argentina (-3.1%), Mexico (-2.8%), and South Africa (-2.5%). China, where COVID-19 originated, is forecasted to grow by 2.8%, a significant drop from the previous high growth rate of 5-6%, but still positive growth. Emerging markets excluding China are expected to record 0% growth.

The IIF stated, "It is currently unclear how long the lockdown measures being implemented in many countries to prevent the spread of the virus will last," adding, "Considering the severity of the shock, it is also uncertain whether consumption and investment will quickly rebound after the quarantine measures are lifted."

Meanwhile, the International Monetary Fund (IMF) also forecasted a global recession this year in a statement by Managing Director Kristalina Georgieva, warning that it could be more severe than the 2008-2009 global financial crisis.

This content was produced with the assistance of AI translation services.