Canada’s Economy To Contract 6.2% In 2020: IMF Report

The International Monetary Fund (IMF) has dramatically cut its 2020 growth forecasts as fallout from the coronavirus outbreak hammers the global economy.

In its “World Economic Outlook” report, the IMF said it now expects the global economy will shrink 3.0% this year, compared to its previous estimate for 3.3% growth.

“It is very likely that this year the global economy will experience its worst recession since the Great Depression surpassing that seen during the global financial crisis a decade ago,” the IMF wrote in its report.

For Canada, the IMF said Gross Domestic Product (GDP) will contract 6.2% this year. That marks an eight-percentage-point decline from its forecast of 1.8% growth forecast in January.

The IMF sees a partial rebound in 2021, with expectations that Canada’s economy will grow 4.2% next year.

Among advanced economies, the IMF sees the biggest contraction in Italy, a country that has seen a staggering number of deaths from the crisis, at 9.1%. Japan has the most optimistic forecast at a 5.2% contraction.

“The Great Lockdown, as one might call it, is projected to shrink global growth dramatically. A partial recovery is projected for 2021, with above trend growth rates, but the level of GDP will remain below the pre-virus trend, with considerable uncertainty about the strength of the rebound,” wrote the IMF.