‘Don’t Take Your Foot Off the Gas!’ IMF Frantic in New, Gloomy World Economy Forecast
June 25, 2020 (EIRNS)—The International Monetary Fund just issued an update to its April forecast of a 3% decline in world GDP, to now predict that the collapse will be 4.9%. France, Italy and Spain are forecast to have drops of over 12%, followed by the U.K. with over 10% and Germany and the U.S. with or close to 8%, Russia with over 7% and Japan with almost 6%. Only China will show a growth rate—of 1%.
Since their mid-April projection, economic data suggest “even deeper downturns than previously projected,” the Fund said. And the new forecast assumes countries will not re-impose comprehensive lock-downs even if the pandemic flares up again.
John Lipsky, a former IMF senior adviser who is now with the Atlantic Council, explained in the Washington Post what the IMF is really trying to say. “Today’s IMF report is a warning to the world about what will happen if policymakers take their foot off the gas.... The uncertain spread of the virus, risk of rising trade tensions, and debt vulnerabilities in emerging economies all lead to the same conclusion—we have not done enough”—meaning even further quantitative easing and hyperinflationary measures are required.