The International Monetary Fund (IMF) has predicted a worse contraction in the global economy due to the ongoing pandemic.
According to the details, the chief economist of IMF Gita Gopinath in her recent statement, said financial crisis triggered by the pandemic was more global and playing out differently than past crises, with the services sector hit harder than building in both advanced and emerging market economies, and inflation low across the board.
The Chief Economist of IMF Gita Gopinath said there were signs of early recovery in many countries that were reopening their economies, but new waves of coronavirus infections and reimposed lockdown measures still feigned risks.
Gopinath said that suppressed consumer demand could fuel a quicker rebound in hard-hit services, but this was not confirmed since consumers might change spending behavior to minimize social interaction, and uncertainty could trigger higher savings rates.
Gopinath said the longer-term impact on tourism-dependent economies was a particular concern, and governments should pursue policies to reallocate workers from shrinking sectors to those with stronger prospects.