IMF slashes global growth forecast amid rising coronavirus cases

The International Monetary Fund (IMF) on Wednesday slashed its forecast for annual global economic growth as the coronavirus cases spike in the U.S. and developing countries.

The IMF is now projecting global economic gross domestic product (GDP) to fall 4.9 percent in 2020, 1.9 percentage points higher than the 3-percent decline the international lender projected in April.

While the IMF expects global GDP growth to rebound to 5.4 percent next year, that rate is still 6.5 percentage points below the growth level projected by the IMF in January.

The emergence of the pandemic and the shutdowns imposed to fight it will cost the global economy more than $12 trillion over the next two years, said IMF chief economist Gita Gopinath in a Wednesday article.

“The COVID-19 pandemic pushed economies into a Great Lockdown, which helped contain the virus and save lives, but also triggered the worst recession since the Great Depression,” Gopinath wrote.

“Over 75 percent of countries are now reopening at the same time as the pandemic is intensifying in many emerging market and developing economies. Several countries have started to recover. However, in the absence of a medical solution, the strength of the recovery is highly uncertain and the impact on sectors and countries uneven,” she wrote.

The IMF’s dire projections come amid increasing concern about the economic blow of rising coronavirus cases across much of the U.S. and countries with far less developed medical infrastructures.

The daily number of new COVID-19 cases in the U.S. is the highest it has been since April as several states around the country experience spikes in cases, according to data released by Johns Hopkins University on Wednesday.

Anthony Fauci, the U.S. government’s top infectious disease expert, called the increases “disturbing” during testimony before a House committee Tuesday, urging swift action to help slow the spread and track outbreaks in U.S. hot spots.

“Right now, the next couple of weeks are going to be critical in our ability to address those surgings that we’re seeing in Florida, in Texas, in Arizona and in other states,” Fauci told the House Energy and Commerce Committee.

The U.S.’s struggle to prevent broader outbreaks comes as developing countries abroad stare down staggering increases.

India on Wednesday recorded a new single-day record of coronavirus cases of 15,968, bringing the nationwide total to 456,183 cases, according to the country’s Ministry of Health and Family Welfare.

The deepening anxiety about the path of pandemic also shook Wall Street on Wednesday.

The Dow Jones Industrial Average had lost roughly 650 points by just after 11 a.m. Eastern on Wednesday, falling 2.5 percent. The S&P 500 had fallen 2.4 percent and the Nasdaq was down roughly 2 percent.