World Economic Outlook: 2020

Introduction:

• The October edition of the World Economic Outlook 2020 has been released by the International Monetary Fund (IMF). 'A long and difficult ascent' is the title of the report.

Key Findings:

• The widespread of Covid-19 pandemic and the strict lockdowns has pushed the world into a deep recession.
• Global economy is projected to grow at a rate of 4.4% in 2020. This is much lesser than the June 2020 predictions.
• Asian Economy will contract by 2.2% in 2020. The worst-hit Nations are India, Philippines and Malaysia.
• In 2021, global growth expectancy is projected at 5.2%. The growth is expected to be marginal.
• The economy will shrink in 2020, and recover in 2021.
• In 2021, the global GDP level is expected to be 0.6% more, when compared to 2019.
• After 2021, the global economy is expected to grow by 3.5% in the medium term.
• The growth projection shows a negative trend, and the employment levels are going to rise, both in advanced and emerging markets.
• However, the exception is that China is showing positive growth at 1.5% in 2020.
• Nearly 90 million people are going to get income less than $1.90/ day.
• Local transmission of Covid-19 is expected to decrease at the end of 2022.

India Specific Findings:

• Indian Economy is expected to shrink by 10.3% for the year 2020. The contraction was expected only by 4.5% in June. There is a 5.8% increase in the shrinking rate as compared to the June forecast.
• In 2021, the growth rate is expected to be 8.8%.
• In 2025, the annual growth is projected at 7.2%.
• Consumer Prices are forecasted to grow at 4.9% in 2020 and 3.7% in 2021.
• Current account balance projected at 0.3% in 2020 and -0.9% in 2021.

Questions:

Ques: 1: Which organization published the World Economic Outlook?
a. IBRD
b. UN
c. WTO
d. IMF
e. None of the above

Answer: d

Explanation: The World Economic Outlook is published by the International Monetary Fund.

Ques: 2: According to IMF’s Global Economic Outlook 2020 October report, Indian economy is expected to shrink in 2020 by-
a. 9.5%
b. 8.5%
c. 8.8%
d. 10.3%
e. 11.2%

Answer: d

Explanation: The IMF, in its World Economic Outlook 2020 October report has predicted that the Indian economy will shrink by 10.3% in 2020.

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