IMF: Consumer sentiments key in economic global recovery

International Monetary Fund (MF) a World Bank financial arm, projects the global economy to recover in 2021 and grow by 5.8% with the advanced economies, emerging markets and developing economies and the SSA economies growing by 4.5%, 6.6%, and 4.1%, respectively.

That rebound of the economies according to IMF, will however be pegged on the restoration of consumer and investor confidence and the pandemic fading by H1’2020.

Currencies of commodity exporters among the emerging and developed economies have depreciated sharply with the US Dollar, Yen and the Euro appreciating by 8.5%, 5.0%, and 3.0%, respectively.

IMF proposes that the provision of adequate healthcare system resources, provision of zero-interest emergency loans, grants and medical equipment to the constrained countries by the multilateral corporations and setting up policies for the recovery phase will help cushion the global economy from the impacts of the pandemic.

In our view, increased spending on health-care systems will enable countries to contain the spread of the virus setting pace for the recovery of the economy.

External support provided by the multilateral corporations will preempt the decline of investors’ confidence in the economies leading to stability in the economies.

Should the pandemic prove to be more persistent than anticipated, IMF says, the global economic growth will contract in 2020 and recover slowly in 2021.

The global economy is expected to contract sharply by 3 percent this year in a baseline scenario as a result of the pandemic, the worst recession since the Great Depression in the 1930s, according to the IMF’s latest World Economic Outlook (WEO) report released last week.

Advanced economies will contract significantly by 6.1 percent in 2020, and emerging market and developing economies, which typically have growth levels well above advanced economies, will shrink by 1.0 percent.