MNI BRIEF: IMF Pares 2020 GDP Fall 0.8pp to 4.4%, Akin to `30s

The IMF said global GDP will contract 4.4% this year in what remains the worst setback for the world's economy since the Great Depression in the 1930s, despite lifting its estimate 0.8pp from a June forecast on signs richer nations have made some progress amid the Covid-19 pandemic.

The IMF also lowered its 2021 GDP estimate 0.2pp to +5.2% and said total output next year will remain below 2019 levels, with the exception of China. Growth will slow to around +3.5% in the medium term. Governments must avoid removing stimulus even with sovereign debt levels moving to a record 100% of global GDP this year, the fund's World Economic Outlook report said.

"This crisis will likely leave scars well into the medium term as labor markets take time to heal, investment is held back by uncertainty and balance sheet problems, and lost schooling impairs human capital," the IMF said.