Coronavirus Update: IMF projection for global economy

The widespread of the Covid19 has left businesses around the world counting costs and project an image of recovery and how it would look like. It is no surprise that there is a global share in flux as big shifts are being observed in stock markets. Shares in companies that are bought and sold can affect the value of the pension or individual savings accounts. The FTSE, Dow Jones Industrial Average, and the Nikkei all saw huge falls given the number of cases is constantly increasing with each passing day. The Dow and the FTSE observed their biggest quarterly drops since 1987.

To compensate for the losses, central banks in many countries slashed interest rates and that should make borrowing cheaper and encourage spending to boost the economy. Global markets have recovered on some ground as governments have intervened. Although, some analysts have warned that they could volatile until the fears of a second wave of the pandemic are erased. The losses have curbed the jobs as well and hence, more people are seeking work more than before. The crisis had led to income cuts and unemployment rates have increased across major economies as well. In the US, the proportion of people out of the workforce has hit 10.4 percent, signaling an end to a decade of expansion.

Millions of workers are on government-supported jobs such as tourism or hospitality that has come to a standstill under lockdown. Despite the figures, there have been some signs of recovery in the global jobs market as China and France have seen increases in hiring rates as shutdowns are easing. Some experts and analysts are claiming that it would take years before the levels of employment return to those seen before the pandemic. As IMF says that the global economy will shrink by 3 percent this year, hence the level of employment will remain low.

The global economy shrinking is being described as the worst since the Great Depression of the 1930s. IMF has stated that the Coronavirus pandemic has plunged the world into a crisis like no other, it expects global growth to rise to 5.8 percent next year. The prediction will come to pass only if the pandemic fades in the second half of 2020 and it heavily relies on the growth rate in countries like India and China. Major economies such as the US and the UK, are projected to grow at a slower rate.