IMF revises year's growth forecast to 1.9%

China’s economy is expected to grow 1.9 percent this year, almost twice as much as previously forecast, the International Monetary Fund said on Tuesday, tagging the country as the only major nation likely to expand in the face of the coronavirus.

China, which saw a strong early reopening and rebound from the pandemic, will reach 8.2 percent growth in 2021, its highest rate in nearly a decade, the IMF said in its latest World Economic Outlook.

China had reopened most of its economy by April and has seen strong demand for exports of its medical supplies and technology products needed to aid remote working, the IMF said.

“While recovery in China has been faster than expected, the global economy’s long ascent back to pre-pandemic levels of activity remains prone to setbacks,” the IMF said.

The IMF forecast a 2020 global contraction of 4.4 percent, an improvement over a 5.2 percent contraction predicted in June, when business closures reached their peak. It is still the worst economic crisis since the 1930s Great Depression, the Fund said.

The global economy will return to growth of 5.2 percent in 2021, the IMF said, but the rebound will be slightly weaker than forecast in June, partly due to the extreme difficulties for many emerging markets and slowing reopening momentum as the virus continues to spread.

IMF chief economist Gita Gopinath said some US$12 trillion in fiscal support and unprecedented monetary easing from governments and central banks helped to limit the damage, but employment remains well below pre-pandemic levels, with low-income workers, youth and women hardest hit.

The IMF said that the United States will see a 4.3 percent contraction in GDP during 2020.