International Monetary Fund (IMF) Chief Economist Gita Gopinath has said that the economic fallout from the coronavirus pandemic could potentially inflict grave damage worldwide and the recovery from this seems highly uncertain at this time. In April, the IMF had predicted that the coronavirus pandemic could cause a global economic contraction of 3 per cent. Gopinath now says that the updated forecast expected to be released in June paints an even darker picture of the global economy, according to news agency AFP.
Gopinath, in a virtual address to the 7th Asian Monetary Policy Forum, said, "There is profound uncertainty of recovery". She added that one has to be concerned about the path of recovery of the global economy. Damage already done to certain sectors such as transportation coupled with the growing risk of bankruptcies, job losses and unexpected change in consumer behaviour are all things to be concerned about going forward.
"Many of these variables point to significant scarring effects," she said, adding that these could potentially harm the global economy in a grave non-reversible way.
Back in April, the IMF in its World Economic Outlook had clearly stated that the downturn caused by the coronavirus pandemic would worsen if the outbreak were to continue for a prolonged period of time or if it so a resurgence in the coming months.
The World Bank had said last week that it expects the global economy to contract by 5.2 per cent in what would turn out to be the biggest economic crisis in the last 150 years.
Gopinath has been the chief economic advisor of the IMF since 2019. In the past, she has also served as the economic advisor to the Chief Minister of Kerala.