## EXECUTIVE SUMMARY

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### Human and economic impact
- The COVID-19 pandemic is inflicting high and rising human costs worldwide; protecting lives and allowing health care systems to cope have required isolation, lockdowns, and widespread closures to slow the spread of the virus.
- The health crisis is having a severe impact on economic activity; as a result of the pandemic, the global economy is projected to contract sharply by –3 percent in 2020, much worse than during the 2008–09 financial crisis.
- In a baseline scenario, which assumes that the pandemic fades in the second half of 2020 and containment efforts can be gradually unwound, the global economy is projected to grow by 5.8 percent in 2021 as economic activity normalizes, helped by policy support.

### Uncertainty and risks
- There is extreme uncertainty around the global growth forecast.
- The economic fallout depends on interacting factors that are hard to predict, including:
  - the pathway of the pandemic and the intensity and efficacy of containment efforts;
  - the extent of supply disruptions;
  - repercussions of the dramatic tightening in global financial market conditions;
  - shifts in spending patterns and behavioral changes (such as people avoiding shopping malls and public transportation);
  - confidence effects and volatile commodity prices.
- Many countries face a multi-layered crisis comprising a health shock, domestic economic disruptions, plummeting external demand, capital flow reversals, and a collapse in commodity prices.
- Risks of a worse outcome predominate.

### Policy priorities and recommendations
- Immediate priority: contain the fallout from the COVID-19 outbreak by increasing health care expenditures to strengthen the capacity and resources of the health care sector while adopting measures that reduce contagion.
- Economic policies should:
  - cushion the impact of the decline in activity on people, firms, and the financial system;
  - reduce persistent scarring effects from the unavoidable severe slowdown;
  - ensure that the economic recovery can begin quickly once the pandemic fades.
- Because the economic fallout reflects particularly acute shocks in specific sectors, substantial targeted fiscal, monetary, and financial market measures are needed to support affected households and businesses.
  - Such actions help maintain economic relationships throughout the shutdown and are essential to enable activity to gradually normalize once the pandemic abates and containment measures are lifted.
- Fiscal response:
  - The fiscal response in affected countries has been swift and sizable in many advanced economies (such as Australia, France, Germany, Italy, Japan, Spain, the United Kingdom, and the United States).
  - Many emerging market and developing economies (such as China, Indonesia, and South Africa) have also begun providing or announcing significant fiscal support to heavily impacted sectors and workers.
  - Fiscal measures will need to be scaled up if stoppages to economic activity are persistent, or the pickup in activity as restrictions are lifted is too weak.
  - Economies facing financing constraints to combat the pandemic and its effects may require external support.
  - Broad-based fiscal stimulus can preempt a steeper decline in confidence, lift aggregate demand, and avert an even deeper downturn, but it would most likely be more effective once the outbreak fades and people are able to move about freely.
- Monetary and financial measures:
  - Significant actions of large central banks include monetary stimulus and liquidity facilities to reduce systemic stress; these actions have supported confidence and help limit amplification of the shock.
  - Synchronized actions can magnify impact on individual economies and create space for emerging market and developing economies to use monetary policy to respond to domestic cyclical conditions.
  - Supervisors should encourage banks to renegotiate loans to distressed households and firms while maintaining a transparent assessment of credit risk.
- Multilateral cooperation:
  - Strong multilateral cooperation is essential to overcome the effects of the pandemic, including to help financially constrained countries facing twin health and funding shocks, and for channeling aid to countries with weak health care systems.
  - Countries urgently need to work together to slow the spread of the virus and to develop a vaccine and therapies; until such medical interventions become available, no country is safe from the pandemic as long as transmission occurs elsewhere.

### Key projections and statistics (from Table 1.1)
- World Output: 2019 = 2.9; 2020 = –3.0; 2021 = 5.8.
- Difference from January 2020 WEO Update: 2020 = –6.3; 2021 = 2.4.
- Advanced Economies: 2019 = 1.7; 2020 = –6.1; 2021 = 4.5.
- United States: 2019 = 2.3; 2020 = –5.9; 2021 = 4.7.
- Euro Area: 2019 = 1.2; 2020 = –7.5; 2021 = 4.7.
- Germany: 2019 = 0.6; 2020 = –7.0; 2021 = 5.2.
- France: 2019 = 1.3; 2020 = –7.2; 2021 = 4.5.
- Italy: 2019 = 0.3; 2020 = –9.1; 2021 = 4.8.
- Spain: 2019 = 2.0; 2020 = –8.0; 2021 = 4.3.
- Japan: 2019 = 0.7; 2020 = –5.2; 2021 = 3.0.
- United Kingdom: 2019 = 1.4; 2020 = –6.5; 2021 = 4.0.
- Canada: 2019 = 1.6; 2020 = –6.2; 2021 = 4.2.
- Emerging Market and Developing Economies: 2019 = 3.7; 2020 = –1.0; 2021 = 6.6.
- Emerging and Developing Asia: 2019 = 5.5; 2020 = 1.0; 2021 = 8.5.
- China: 2019 = 6.1; 2020 = 1.2; 2021 = 9.2.
- India (fiscal year basis): 2019 = 4.2; 2020 = 1.9; 2021 = 7.4.
- ASEAN-5 (Indonesia, Malaysia, Philippines, Thailand, Vietnam): 2019 = 4.8; 2020 = –0.6; 2021 = 7.8.
- Emerging and Developing Europe: 2019 = 2.1; 2020 = –5.2; 2021 = 4.2.
- Russia: 2019 = 1.3; 2020 = –5.5; 2021 = 3.5.
- Latin America and the Caribbean: 2019 = 0.1; 2020 = –5.2; 2021 = 3.4.
- Brazil: 2019 = 1.1; 2020 = –5.3; 2021 = 2.9.
- Mexico: 2019 = –0.1; 2020 = –6.6; 2021 = 3.0.
- Middle East and Central Asia: 2019 = 1.2; 2020 = –2.8; 2021 = 4.0.
- Saudi Arabia: 2019 = 0.3; 2020 = –2.3; 2021 = 2.9.
- Sub-Saharan Africa: 2019 = 3.1; 2020 = –1.6; 2021 = 4.1.
- Nigeria: 2019 = 2.2; 2020 = –3.4; 2021 = 2.4.
- South Africa: 2019 = 0.2; 2020 = –5.8; 2021 = 4.0.
- European Union (memorandum): 2019 = 1.7; 2020 = –7.1; 2021 = 4.8.
- Low-Income Developing Countries (memorandum): 2019 = 5.1; 2020 = 0.4; 2021 = 5.6.
- World Growth Based on Market Exchange Rates: 2019 = 2.4; 2020 = –4.2; 2021 = 5.4.
- World Trade Volume (goods and services): 2019 = 0.9; 2020 = –11.0; 2021 = 8.4.
- Oil (US dollars, simple average of UK Brent, Dubai Fateh, and West Texas Intermediate):
  - The average price of oil in US dollars a barrel was $61.39 in 2019; the assumed price, based on futures markets, is $35.61 in 2020 and $37.87 in 2021.
- Consumer Prices:
  - Advanced Economies: 2019 = 1.4; 2020 = 0.5; 2021 = 1.5.
  - Emerging Market and Developing Economies (excludes Venezuela): 2019 = 5.0; 2020 = 4.6; 2021 = 4.5.
- London Interbank Offered Rate (percent):
  - On US Dollar Deposits (six month): 2019 = 2.3; 2020 = 0.7; 2021 = 0.6.

*Source: IMF staff.*

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_Source: https://www.imf.org/-/media/files/publications/weo/2020/april/english/execsum.pdf_