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The International Monetary Fund is projecting a deep global recession in 2020 because of the COVID-19 pandemic, with global economies expected to shrink by 4.4%.
Speaking Tuesday at the IMF's World Economic Outlook Forum in Boston, IMF chief economist Gita Gopinath said the pandemic shut down business and industry throughout the world.
While most economies reopened, prompting the IMF to improve its current forecast to somewhat over its June prediction, Gopinath said resurgences of the virus and other political uncertainties suggest the global economic recovery will be slow and uneven well into 2021.
Gopinath said there are several things governments can do to speed worldwide economic recovery. She called for much better international cooperation to end the pandemic, in terms of creating and sharing treatments and vaccines once they are available and producing them at a large scale.
She also stressed that national monetary and fiscal policies should not be held back. Specifically, she said governments should focus on direct aid to households and businesses.
In comments to the French news agency, Gopinath said if the United States passed another stimulus package similar to the $2.2 trillion measure passed earlier this year, it would significantly help the U.S. economy recover, as well as the world.
Gopinath said assuming a second stimulus is not approved by the U.S. Congress, the IMF predicts the U.S. economy would grow by about 3.1% next year. But she said a second package would add two percentage points to that growth, bringing the U.S economy back to pre-pandemic levels much more quickly.
She said a quick recovery by the world's largest economy would benefit the world, especially its neighbors, Mexico and Canada.