US Economy to Shrink By 6.6 Percent In 2020
The US economy is forecast to shrink by 6.6 percent in 2020 due to the shock of the coronavirus pandemic, but a resurgence in coronavirus infections and a systemic increase in poverty could worsen that outlook, as per IMF. =IMF cited other risks, including a big increase in government and corporate debt levels, and the prospect of a long period of low, or even negative, inflation. "There are tremendous uncertainties surrounding the economic propagation of the COVID-19 shock. It will likely take a prolonged period to repair the economy and to return activity to pre-pandemic levels." According to IMF, US policymakers had acted quickly and assertively to protect US lives and businesses, but further policy steps would be needed to boost demand and support the most vulnerable. It cited urgent warning signs that the crisis was hitting poor Americans and racial minorities the hardest, and would lead to a systemic increase in poverty. That would increase risks to the overall economy and could contribute to social unrest. It said the United States should reverse existing trade restrictions and tariff increases that were undermining global trade stability, and warned against treating undervalued currencies as countervailable subsidies. The US financial system had proven resilient, but the crisis was still at an early stage and banks should continue to restrain capital distribution plans.
Tags : INTERNATIONAL US Economy