International Monetary Fund expects Malaysia's GDP to increase 7.8 percent next year

More synchronized action needed to tackle COVID economic crisis IMF's Georgieva says

The IMF expects the Chinese government to continue with its infrastructure spending to bolster growth through 2021. The global growth rate for 2020-'21 would be a negative 4.4%, and for 2021-'22 it would be a positive 5.2%, it added.

Gross domestic product (GDP) will shrink 10.3% in the fiscal year to March 2021, the Washington-based lender said in its World Economic Outlook, far worse than the 4.5% decline predicted in June.

In its World Economic Outlook report on Tuesday, the International Monetary Fund forecast that India would grow at 8.8% in 2021-'22, faster than China, which is projected to grow at 8.2%.

Finance ministers and central bank presidents from the Group of Seven wealthy industrial countries - the United States, Japan, Germany, France, Britain, Italy and Canada - held a videoconference led by U.S. Treasury Secretary Steven Mnuchin to discuss debt relief proposals for poor nations and their efforts to support the global economy, the Treasury said.

America's economy is projected to contract by 5.8 per cent in 2020 and grow by 3.9 per cent the next year, the International Monetary Fund said.

Gopinath said that except for China, where output is expected to exceed 2019 levels this year, output in both advanced economies and emerging market and developing economies is projected to remain below 2019 levels even next year. The IMF now expects the world economy to grow by 5.2% next year, a -0.2 percentage points downgrade from June's forecast.

Economies will continue to rebound after 2021 but will settle into relatively weak growth at a lower level of output than expected before the pandemic, the fund warned; the long-term hit in advanced economies will be 3.5 per cent of national income, and 5.5 per cent in emerging economies.

The uncertainty surrounding the baseline projection is unusually large. According to the report, India is among those likely to suffer the greatest damage from global warming, reflecting its initially high temperatures.

Given that the inflation rates in emerging markets have started to go down, easing monetary policy, which includes introducing more interest cuts, is needed, especially the cuts that have been introduced in the emerging markets, including Egypt, since the onset of the pandemic encouraged individuals and the private sector to borrow, according to Adrian.

But the outlook for India is down by 5.8 points to minus 10.3 percent.

The IMF said on Tuesday said that as many as 90 million people could be plunged beneath into extreme poverty this year, meaning they will be forced to survive on less than $1.90 a day.

"This is the worst crisis since the Great Depression, and it will take significant innovation on the policy front, at both the national and worldwide levels, to recover from this calamity", Gopinath said.