UK & Euro Area to Lose 10% of GDP This Year, 2021 to Make Up for Just Half of It
France, Spain, Italy to lose over 12%
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The UK economy is set to shrink by 10.2 per cent this year as coronavirus hits like a wrecking ball, the IMF said today.
The grim forecast for Britain is significantly worse than the Fund suggested as recently as April – although not as bad as for some other European countries.
The IMF said it now sees more pain around the world, with global output tumbling by 4.9 per cent instead of the 3 per cent expected in April. For the first time, every region of the world will be in recession at once.
The recovery will also be weaker next year, at 5.4 per cent rather than 5.8 per cent.
In a stark warning, it said a resurgence in the pandemic cold send even that figure tumbling to just 0.5 per cent.
The latest UK estimates are for a deeper recession this year than in Japan, Germany, the US and Canada – which are in line for 5.8 per cent, 7.2 per cent, eight per cent and 8.4 per cent falls in GDP respectively.
The 10.2 per cent plunge is 3.7 percentage points bigger than anticipated before.
But other countries are predicted to fare worse, with France facing a 12.5 per cent recession and Italy and Spain 12.8 per cent.
The UK bounceback next year is also greater than some other major economies, at 6.3 per cent – although that would still leave the country significantly less wealthy.
The Fund said despite lockdowns being eased in many places the curbs and social distancing had hit both investment and consumption.
‘Thus, there is a broad-based aggregate demand shock, compounding near-term supply disruptions due to lockdowns,’ the IMF said in an update of its World Economic Outlook forecast.
The eight per cent drop for the US and 10.2 per cent for the Eurozone this year are both more than two percentage points worse than the figures from April.
Latin American economies, where infections are still rising, saw some of the largest downgrades, with the Brazil economy now expected to shrink 9.1 per cent, Mexico’s 10.5 per cent and Argentina’s 9.9 per cent in 2020.
China, where businesses started reopening in April and new infections have been minimal, is the only major economy now expected to show positive growth in 2020, trimmed slightly to 1 per cent compared to 1.2 per cent envisaged two months ago.
The IMF said that more policy actions from governments and central banks would be needed to support jobs and businesses to limit further damage and set the stage for recovery.
Source: The Daily Mail
I understand that the nature of this article is reflecting the “pain” of such an economic collapse but the article should be seen in the greater picture that these shutdowns were deliberately enforced in order to cause economies to shrink. When economies shrink and collapse either due to the “organic” nature of too much debt or other economic aspects, or due to a set of policies meant to cause as much damage in order to put in place something else, articles like this will simply report the pain caused by that damage.
If the reader is not aware of this aspect it would lead to anger and resentment for in the readers mind he knows of the deliberate nature of this destruction and reading about the pain sounds disjointed and almost macabre.
It would be like a person who is flogging a victim with a whip lined with razor blades. The bloody whipping has caused the victim to bleed to death. At the same time there stands a reporter who reports on how that person is brutally flogging his victim and then reports on the pain and the slow miserable death of that victim. One would be feel compelled to tell the reporter to report on the entire sadistic act and demand that it stops.
GDP is a poor measure —poverty, extreme poverty, wealth/income disparities, food insecurity, universal health, state paid higher education, mandatory paid parental/maternity leave, crime, social cohesion, etc far more important….the USA ranks #2 by PPP, while #1 nominally–yet US has no positive rights and ranks among the worst in all of these categories that measure civilization—while the US spends more on schools designed to socialize than any other nation per student, 1/3 cannot read beyond the 5th grade level and only 30% of US university grads r English proficient–Asians then blacks the best and improving, whites and Latins, the worst and declining per the US dept of education
of course such people cannot comprehend they live in a decaying empire near collapse
Hey MODERATOR… Go take care of the pending comments!
For fucks sake! Don’t use propaganda sources!
Those fuckers are FORGETTING the next Great INFLUENZA SEASON 2020/2021… And it it a whole new array of lockdowns, knockdowns, fuckdowns will happen, so NO RECOVERY WHAT SO EVER!
Daily Mail is OK, can be quite contrarian, throw some truth in the mix sometimes. Obviously a pinch of salt, or five, at the ready is best practice when flicking through it!