More than 90 million people could be forced into “extreme deprivation” this year as developing and emerging economies are hit hardest by the coronavirus pandemic, the International Monetary Fund (IMF) has warned.
In its latest World Economic Outlook, the world’s lender of last resort predicts the pandemic will undo decades of progress in reducing global inequality and poverty, leaving the poorest nations worst affected.
The report forecasts a global contraction in gross domestic product (GDP) of -4.4% in 2020, slightly more positive than its last forecast in June, followed by a recovery of 5.2% in 2021, leaving global output smaller than it was pre-pandemic in 2019.
While the IMF says the negative economic impact of COVID-19 has been truly global with no nation spared, it makes clear more than 150 nations it does not classify as advanced economies will be worst affected.
The growth in per-capita income for emerging and developing economies will be lower than in advanced economies, with women, the young and the low-paid suffering most.
“The poor are getting poorer with close to 90 million people expected to fall into extreme deprivation this year. The ascent out of this calamity is likely to be long, uneven, and highly uncertain,” said Gita Gopinath, the IMF chief economist.
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