The coronavirus pandemic has hit hard on the global economy. The severe contraction in the global economy faced in 2020 can only be reversed by a strong comeback in 2021.

But the International Monetary Fund (IMF) announced on Tuesday that the recovery process might not be that easy. The IMF recently cut down on its global economic forecasts saying that the next year may bring slow and long recovery that will increase global poverty and severely impair growth.

IMF Shrinks 2021 Global Economy Forecast

On Tuesday, the IMF announced that the global economy of 2020 is likely to shrink less than it had expected in June. Saying that by the end of 2020, there could be a 4.4% shrink, IMF said that this was largely because of the US, Europe, and China’s bouncing back to growth after months of lockdown.

On the other hand, the IMF cut the global economy forecast for next year to 5.2%. This is down from an earlier 5.4% forecast of global output. The previous month, the Economic Cooperation and Development Organization also downgraded its 2021 global economic forecast.

Global Economy Heading Towards Bleak Years

Gita Gopinath, IMF Chief Economist mentioned in a blog post that the revival from this global calamity was likely to be long-drawn, erratic, and uncertain.

The economic output of various emerging countries in 2021, excepting China, she mentions, is likely to remain below that of 2019.

The global economy poses a bleak look with global growth likely to slow by 3.5% from 2022-25.