The IMF’s World Economic Outlook of October 2019 now reads like a document from a bygone era. It projected global growth to bounce back in 2020 with a 3.4% expansion, beating out the 3.0% recorded in 2019 (lowest since the Great Recession).
Fast-forward to the present and the Fund is forecasting a global contraction of 4.4% in 2020.
The impact of COVID-19 has been profound; it will take several years for the global economy to get back on track, and when it finally does developing and developed economies alike will almost universally be saddled with onerous debt burdens. Some $15 trillion was added to global debt over the first three quarters of 2020 alone, and that number will continue to grow well into next year.
Many expect 2021 to mark the beginning of a global economic recovery, and its success will largely be dictated by COVID-19 vaccines – how effective they are, and how many people can be vaccinated in as short a time as possible. But even assuming the best-case scenario of a rapid and effective vaccine rollout, will the global economy simply pick up where it left off in 2019? Or will certain behaviors and risks continue to blight economic regeneration for years to come?