International Monetary Fund | June 2020 1WORLD ECONOMIC OUTLOOK UPDATEJune2020A Crisis Like No Other, An Uncertain RecoveryGlobal growth is projected at –4.9 percent in 2020, 1.9 percentage points below the April 2020 WorldEconomic Outlook (WEO) forecast. The COVID-19 pandemic has had a more negative impact on activityin the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast.In 2021 global growth is projected at 5.4 percent. Overall, this would leave 2021 GDP some 6½ percentagepoints lower than in the pre-COVID-19 projections of January 2020. The adverse impact on low-incomehouseholds is particularly acute, imperiling the significant progress made in reducing extreme poverty in the worldsince the 1990s.As with the April 2020 WEO projections, there is a higher-than-usual degree of uncertainty around thisforecast. The baseline projection rests on key assumptions about the fallout from the pandemic. In economies withdeclining infection rates, the slower recovery path in the updated forecast reflects persistent social distancing into thesecond half of 2020; greater scarring (damage to supply potential) from the larger-than-anticipated hit to activityduring the lockdown in the first and second quarters of 2020; and a hit to productivity as surviving businessesramp up necessary workplace safety and hygiene practices. For economies struggling to control infection rates, alengthier lockdown will inflict an additional toll on activity. Moreover, the forecast assumes that financialconditions—which have eased following the release of the April 2020 WEO—will remain broadly at currentlevels. Alternative outcomes to those in the baseline are clearly possible, and not just because of how the pandemicis evolving. The extent of the recent rebound in financial market sentiment appears disconnected from shifts inunderlying economic prospects—as the June 2020 Global Financial Stability Report (GFSR) Updatediscusses—raising the possibility that financial conditions may tighten more than assumed in the baseline.All countries—including those that have seemingly passed peaks in infections—should ensure that their healthcare systems are adequately resourced. The international community must vastly step up its support of nationalinitiatives, including through financial assistance to countries with limited health care capacity and channeling offunding for vaccine production as trials advance, so that adequate, affordable doses are quickly available to allcountries. Where lockdowns are required, economic policy should continue to cushion household income losses withsizable, well-targeted measures as well as provide support to firms suffering the consequences of mandatedrestrictions on activity. Where economies are reopening, targeted support should be gradually unwound as therecovery gets underway, and policies should provide stimulus to lift demand and ease and incentivize thereallocation of resources away from sectors likely to emerge persistently smaller after the pandemic.Strong multilateral cooperation remains essential on multiple fronts. Liquidity assistance is urgently needed forcountries confronting health crises and external funding shortfalls, including through debt relief and financingthrough the global financial safety net. Beyond the pandemic, policymakers must cooperate to resolve trade andtechnology tensions that endanger an eventual recovery from the COVID-19 crisis. Furthermore, building on therecord drop in greenhouse gas emissions during the pandemic, policymakers should both implement their climatechange mitigation commitments and work together to scale up equitably designed carbon taxation or equivalentschemes. The global community must act now to avoid a repeat of this catastrophe by building global stockpiles ofessential supplies and protective equipment, funding research and supporting public health systems, and putting inplace effective modalities for delivering relief to the neediest.2 International Monetary Fund | June 2020COVID-19 Crisis: More Severe Economic Fallout than AnticipatedEconomic data available at the time of the April 2020 WEO forecast indicated anunprecedented decline in global activity due to the COVID-19 pandemic. Data releases sincethen suggest even deeper downturns than previously projected for several economies.The pandemic has worsened in many countries, leveled off in others. Following the release of the April2020 WEO, the pandemic rapidly intensified in a number of emerging market and developingeconomies, necessitating stringent lockdowns and resulting in even larger disruptions to activitythan forecast. In others, recorded infections and mortality have instead been more modest on aper capita basis, although limited testing implies considerable uncertainty about the path of thepandemic. In many advanced economies, the pace of new infections and hospital intensive careoccupancy rates have declined thanks to weeks of lockdowns and voluntary distancing.Synchronized, deep downturn. First-quarter GDP was generally worse than expected (the fewexceptions include, for example, Chile, China, India, Malaysia, and Thailand, among emergingmarkets, and Australia, Germany, and Japan, among advanced economies). High-frequencyindicators point to a more severe contraction in the second quarter, except in China, where mostof the country had reopened by early April.Consumption and services output have dropped markedly. In most recessions, consumers dig intotheir savings or rely on social safety nets and family support to smooth spending, andconsumption is affected relatively less than investment. But this time, consumption and servicesoutput have also dropped markedly. The pattern reflects a unique combination of factors:voluntary social distancing, lockdowns needed to slow transmission and allow health caresystems to handle rapidly rising caseloads, steep income losses, and weaker consumerconfidence. Firms have also cut back on investment when faced with precipitous demanddeclines, supply interruptions, and uncertain future earnings prospects. Thus, there is a broadbased aggregate demand shock, compounding near-term supply disruptions due to lockdowns.Mobility remains depressed. Globally, lockdowns were at their most intense and widespread fromabout mid-March through mid-May. As economies have gradually reopened, mobility has pickedup in some areas but generally remains low compared to pre-virus levels, suggesting people arevoluntarily reducing exposure to one another. Mobility data from cellphone tracking, forexample, indicate that activity in retail, recreation, transit stations, and workplaces remainsdepressed in most countries, although it appears to be returning to baseline in certain areas.Severe hit to the labor market. The steep decline in activity comes with a catastrophic hit to theglobal labor market. Some countries (notably in Europe) have contained the fallout witheffective short-term work schemes. Nonetheless, according to the International LabourOrganization, the global decline in work hours in 2020:Q1 compared to 2019:Q4 was equivalentto the loss of 130 million full-time jobs. The decline in 2020:Q2 is likely to be equivalent to morethan 300 million full-time jobs. Where economies have been reopening, activity may havetroughed in April—as suggested, for example, by the May employment report for the UnitedStates, where furloughed workers are returning to work in some of the sectors most affected bythe lockdown.International Monetary Fund | June 2020 3The hit to the labor market has been particularly acute for low-skilled workers who do nothave the option of working from home. Income losses also appear to have been uneven acrossgenders, with women among lower-income groups bearing a larger brunt of the impact in somecountries. Of the approximately 2 billion informally employed workers worldwide, theInternational Labour Organization estimates close to 80 percent have been significantly affected.Contraction in global trade. The synchronized nature of the downturn has amplified domesticdisruptions around the globe. Trade contracted by close to –3.5 percent (year over year) in thefirst quarter, reflecting weak demand, the collapse in cross-border tourism, and supplydislocations related to shutdowns (exacerbated in some cases by trade restrictions).Weaker inflation. Average inflation in advanced economies had dropped about 1.3 percentagepoints since the end of 2019, to 0.4 percent (year over year) as of April 2020, while in emergingmarket economies it had fallen 1.2 percentage points, to 4.2 percent. Downward price pressurefrom the decline in aggregate demand, together with the effects of lower fuel prices, seems tohave more than offset any upward cost-push pressure from supply interruptions so far.Policy Countermeasures Have Limited Economic Damage andLifted Financial SentimentSome bright spots mitigate the gloom. Following the sharp tightening during January–March,financial conditions have eased for advanced economies and, to a lesser extent, for emergingmarket economies, also reflecting the policy actions discussed below.Sizable fiscal and financial sector countermeasures deployed in several countries since thestart of the crisis have forestalled worse near-term losses. Reduced-work-hour programs andassistance to workers on temporary furlough have kept many from outright unemployment,while financial support to firms and regulatory actions to ensure continued credit provision haveprevented more widespread bankruptcies (see Annex 1 and the June 2020 Fiscal MonitorDatabase of Country Fiscal Measures, which discuss fiscal measures amounting to about $11trillion that have been announced worldwide, as well as the April 2020 WEO and the IMF PolicyTracker on Responses to COVID-19, which provide a broader list of country-specificmeasures).Swift and, in some cases, novel actions by major central banks (such as a few emergingmarket central banks launching quantitative easing for the first time and some advancedeconomy central banks significantly increasing the scale of asset purchases) have enhancedliquidity provision and limited the rise in borrowing costs (see the June 2020 GFSR Update).Moreover, swap lines for several emerging market central banks have helped ease dollar liquidityshortages. Portfolio flows into emerging markets have recovered after the record outflows inFebruary-March and hard currency bond issuance has strengthened for those with strongercredit ratings. Meanwhile, financial regulators’ actions—including modification of bank loanrepayment terms and release of capital and liquidity buffers—have supported the supply ofcredit.4 International Monetary Fund | June 2020Stability in the oil market has also helped lift sentiment. West Texas Intermediate oil futures,which in April had sunk deep into negative territory for contracts expiring in the early summer,have risen in recent weeks to trade in a stable range close to the current spot price.Exchange rate changes since early April have reflected these developments. As of mid-June,the US dollar had depreciated by close to 4 percent in real effective terms (after strengthening byover 8 percent between January and early April). Currencies that had weakened substantially inprevious months have appreciated since April—including the Australian dollar and theNorwegian krone, among advanced economy currencies, and the Indonesian rupiah, Mexicanpeso, Russian ruble, and South African rand, among emerging market currencies.Considerations for the ForecastThe developments discussed in the previous section help shape the key assumptions for theglobal growth forecast, in particular with regard to activity disruptions due to the pandemic,commodity prices, financial conditions, and policy support.Disruptions to activity in the forecast baseline. Based on downside surprises in the first quarter andthe weakness of high-frequency indicators in the second quarter, this updated forecast factors ina larger hit to activity in the first half of 2020 and a slower recovery path in the second half thanenvisaged in the April 2020 WEO. For economies where infections are declining, the slowerrecovery path in the updated forecast reflects three key assumptions: persistent social distancinginto the second half of 2020, greater scarring from the larger-than-anticipated hit to activityduring the lockdown in the first and second quarters, and a negative impact on productivity assurviving businesses enhance workplace safety and hygiene standards. For economies stillstruggling to control infection rates, the need to continue lockdowns and social distancing willtake an additional toll on activity. An important assumption is that countries where infectionshave declined will not reinstate stringent lockdowns of the kind seen in the first half of the year,instead relying on alternative methods if needed to contain transmission (for instance, rampedup testing, contact tracing, and isolation). The risk section below considers alternative scenarios,including one featuring a repeat outbreak in 2021.Policy support and financial conditions. The projection factors in the impact of the sizable fiscalcountermeasures implemented so far and anticipated for the rest of the year. With automaticstabilizers also allowed to operate and provide further buffers, overall fiscal deficits are expectedto widen significantly and debt ratios to rise over 2020–21. Major central banks are assumed tomaintain their current settings throughout the forecast horizon to the end of 2021. Moregenerally, financial conditions are expected to remain approximately at current levels for bothadvanced and emerging market economies.Commodity prices. The assumptions on fuel prices are broadly unchanged from the April 2020WEO. Average petroleum spot prices per barrel are estimated at $36.20 in 2020 and $37.50 in2021. Oil futures curves indicate that prices are expected to increase thereafter toward $46, stillabout 25 percent below the 2019 average. Nonfuel commodity prices are expected to risemarginally faster than assumed in the April 2020 WEO.International Monetary Fund | June 2020 5Deep Downturn in 2020, Sluggish Turnaround in 2021Global growth is projected at –4.9 percent in2020, 1.9 percentage points below the April2020 WEO forecast (Table 1). Consumptiongrowth, in particular, has been downgradedfor most economies, reflecting the larger-thananticipated disruption to domestic activity. The projections of weaker privateconsumption reflect a combination of a largeadverse aggregate demand shock from socialdistancing and lockdowns, as well as a rise inprecautionary savings. Moreover, investmentis expected to be subdued as firms defercapital expenditures amid high uncertainty.Policy support partially offsets thedeterioration in private domestic demand.In the baseline, global activity is expectedto trough in the second quarter of 2020,recovering thereafter (Figure 1). In 20211159095100105110 growth is projected to strengthen to 5.4percent, 0.4 percentage point lower than theApril forecast. Consumption is projected tostrengthen gradually next year, and investment852019:Q119:Q219:Q319:Q420:Q120:Q220:Q320:Q421:Q121:Q221:Q321:Q4Source: IMF staff estimates. is also expected to firm up, but to remain subdued. Global GDP for the year 2021 as a whole isforecast to just exceed its 2019 level.Uncertainty. Similarly to the April 2020 WEO projections, there is pervasive uncertaintyaround this forecast. The forecast depends on the depth of the contraction in the second quarterof 2020 (for which complete data are not yet available) as well as the magnitude and persistenceof the adverse shock. These elements, in turn, depend on several uncertain factors, including• The length of the pandemic and required lockdowns• Voluntary social distancing, which will affect spending• Displaced workers’ ability to secure employment, possibly in different sectors• Scarring from firm closures and unemployed workers exiting the workforce, which may makeit more difficult for activity to bounce back once the pandemic fades• The impact of changes to strengthen workplace safety—such as staggered work shifts,enhanced hygiene and cleaning between shifts, new workplace practices relating to proximityof personnel on production lines—which incur business costs• Global supply chain reconfigurations that affect productivity as companies try to enhancetheir resilience to supply disruptionsWorldAdvanced economiesEmerging market and developing economies excluding ChinaChinaFigure 1. Quarterly World GDP(2019:Q1 = 100)6 International Monetary Fund | June 2020• The extent of cross-border spillovers from weaker external demand as well as fundingshortfalls• Eventual resolution of the current disconnect between asset valuations and prospects foreconomic activity (as highlighted in the June 2020 GFSR Update)Growth in the advanced economy group is projected at –8.0 percent in 2020, 1.9 percentagepoints lower than in the April 2020 WEO. There appears to have been a deeper hit to activity inthe first half of the year than anticipated, with signs of voluntary distancing even beforelockdowns were imposed. This also suggests a more gradual recovery in the second half as fearof contagion is likely to continue. Synchronized deep downturns are foreseen in the UnitedStates (–8.0 percent); Japan (–5.8 percent); the United Kingdom (–10.2 percent); Germany (–7.8percent); France (–12.5 percent); Italy and Spain (–12.8 percent). In 2021 the advanced economygrowth rate is projected to strengthen to 4.8 percent, leaving 2021 GDP for the group about 4percent below its 2019 level.Among emerging market and developing economies, the hit to activity from domestic disruptions isprojected closer to the downside scenario envisaged in April, more than offsetting theimprovement in financial market sentiment. The downgrade also reflects larger spillovers fromweaker external demand. The downward revision to growth prospects for emerging market anddeveloping economies over 2020–21 (2.8 percentage points) exceeds the revision for advancedeconomies (1.8 percentage points). Excluding China, the downward revision for emergingmarket and developing economies over 2020–21 is 3.6 percentage points.Overall, growth in the group of emerging market and developing economies is forecast at–3.0 percent in 2020, 2 percentage points below the April 2020 WEO forecast. Growth amonglow-income developing countries is projected at –1.0 percent in 2020, some 1.4 percentagepoints below the April 2020 WEO forecast, although with differences across individualcountries. Excluding a few large frontier economies, the remaining group of low-incomedeveloping countries is projected to contract by –2.2 percent in 2020.For the first time, all regions are projected to experience negative growth in 2020. There are,however, substantial differences across individual economies, reflecting the evolution of thepandemic and the effectiveness of containment strategies; variation in economic structure (forexample, dependence on severely affected sectors, such as tourism and oil); reliance on externalfinancial flows, including remittances; and precrisis growth trends. In China, where the recoveryfrom the sharp contraction in the first quarter is underway, growth is projected at 1.0 percent in2020, supported in part by policy stimulus. India’s economy is projected to contract by 4.5percent following a longer period of lockdown and slower recovery than anticipated in April. InLatin America, where most countries are still struggling to contain infections, the two largesteconomies, Brazil and Mexico, are projected to contract by 9.1 and 10.5 percent, respectively, in2020. The disruptions due to the pandemic, as well as significantly lower disposable income foroil exporters after the dramatic fuel price decline, imply sharp recessions in Russia (–6.6percent), Saudi Arabia (–6.8 percent), and Nigeria (–5.4 percent), while South Africa’sperformance (–8.0 percent) will be severely affected by the health crisis.International Monetary Fund | June 2020 7Q42018 2019 2020 2021 2020 2021 2019 2020 2021 World OutputAdvanced EconomiesUnited StatesEuro AreaGermanyFranceItalySpainJapanUnited KingdomCanadaOther Advanced Economies 3/Emerging Market and Developing EconomiesEmerging and Developing AsiaChinaIndia 4/ASEAN-5 5/Emerging and Developing EuropeRussiaLatin America and the CaribbeanBrazilMexicoMiddle East and Central AsiaSaudi ArabiaSub-Saharan AfricaNigeriaSouth Africa3.––4.9–8.0–8.0–10.2–7.8–12.5–12.8–12.8–5.8–10.2–8.4–4.8–3.0–0.81.0–4.5–2.0–5.8–6.6–9.4–9.1–10.5–4.7–6.8–3.2–5.4––1.9–1.9–2.1–2.7–0.8–5.3–3.7–4.8–0.6–3.7–2.2–0.2–2.0–1.8–0.2–6.4–1.4–0.6–1.1–4.2–3.8–3.9–1.9–4.5–1.6–2.0–2.2–0.40.3–––0.3–0.7–1.1–1.0–1.4––0.70.2–0.70.2–––0.21.6–0.8. . .–0.3. . .. . .–0.6–3.5–7.2–8.2–8.6–6.7–8.9–10.9–11.4–1.8–9.0–7.5–5.1––1.4–7.0–7.5–9.0–9.3–10.1. . .–4.4. . .. . .– . .4.1. . .. . .–2.8MemorandumLow-Income Developing CountriesWorld Growth Based on Market Exchange RatesWorld Trade Volume (goods and services) 6/Advanced EconomiesEmerging Market and Developing EconomiesCommodity Prices (U.S. dollars)Oil 7/Nonfuel (average based on world commodity import weights)Consumer PricesAdvanced Economies 8/Emerging Market and Developing Economies 9/London Interbank Offered Rate (percent)On U.S. Dollar Deposits (six month)On Euro Deposits (three month)On Japanese Yen Deposits (six month)–1.0–6.1–11.9–13.4––1.4–1.9–0.9–1.3–0.5–0.4–0.1–0.4–0.2–0.7. . .2.3. . .. . .. . .. . .–4.9. . .. . .. . .. . .4.8. . .. . .. . .29.41.3–10.20.8––2.51.4–6.14.9–42.6–0.812.–0.2–0.2––––––0.4– . .. . .. . .. . .. . .. . .. . .. . .. . . Note: Real effective exchange rates are assumed to remain constant at the levels prevailing during April 21–May 19, 2020. Economies are listed on the basis of economic size. Theaggregated quarterly data are seasonally adjusted. WEO = World Economic Outlook.1/ Difference based on rounded figures for the current and April 2020 WEO forecasts. Countries whose forecasts have been updated relative to April 2020 WEO forecasts account for 90percent of world GDP measured at purchasing-power-parity weights.2/ For World Output, the quarterly estimates and projections account for approximately 90 percent of annual world output at purchasing-power-parity weights. For Emerging Market andDeveloping Economies, the quarterly estimates and projections account for approximately 80 percent of annual emerging market and developing economies’ output at purchasing-powerparity weights.3/ Excludes the Group of Seven (Canada, France, Germany, Italy, Japan, United Kingdom, United States) and euro area countries.4/ For India, data and forecasts are presented on a fiscal year basis and GDP from 2011 onward is based on GDP at market prices with fiscal year 2011/12 as a base year.5/ Indonesia, Malaysia, Philippines, Thailand, Vietnam.6/ Simple average of growth rates for export and import volumes (goods and services).7/ Simple average of prices of UK Brent, Dubai Fateh, and West Texas Intermediate crude oil. The average price of oil in US dollars a barrel was $61.39 in 2019; the assumed price, basedon futures markets (as of May 19, 2020), is $36.18 in 2020 and $37.54 in 2021.8/ The inflation rate for the euro area is 0.2% in 2020 and 0.9% in 2021, for Japan is -0.1% in 2020 and 0.3% in 2021, and for the United States is 0.5% in 2020 and 1.5% in 2021.9/ Excludes Venezuela.over Q4 2/Table 1. Overview of the World Economic Outlook ProjectionsProjections ProjectionsYear over Year(Percent change, unless noted otherwise)Difference from April 2020WEO Projections 1/8 International Monetary Fund | June 2020In 2021 the growth rate for emerging market and developing economies is projected tostrengthen to 5.9 percent, largely reflecting the rebound forecast for China (8.2 percent). Thegrowth rate for the group, excluding China, is expected to be –5.0 percent in 2020 and 4.7percent in 2021, leaving 2021 GDP for this subset of emerging market and developingeconomies slightly below its 2019 level.Global trade will suffer a deep contraction this year of –11.9 percent, reflecting considerablyweaker demand for goods and services, including tourism. Consistent with the gradual pickup indomestic demand next year, trade growth is expected to increase to 8 percent.Inflation outlook. Inflation projections have generally been revised downward, with larger cutstypically in 2020 and for advanced economies. This generally reflects a combination of weakeractivity and lower commodity prices, although in some cases partially offset by the effect ofexchange rate depreciation on import prices. Inflation is expected to rise gradually in 2021,consistent with the projected pickup in activity. Nonetheless, the inflation outlook remainsmuted, reflecting expectations of persistently weak aggregate demand.Likely Reversal of Progress on Poverty ReductionThese projections imply a particularly acute negative impact of the pandemic on low-incomehouseholds worldwide that could significantly raise inequality. The fraction of the world’spopulation living in extreme poverty—that is, on less than $1.90 a day—had fallen below 10percent in recent years (from more than 35 percent in 1990). This progress is imperiled by theCOVID-19 crisis, with more than 90 percent of emerging market and developing economiesprojected to register negative per capita income growth in 2020. In countries with high shares ofinformal employment, lockdowns have led to joblessness and abrupt income losses for many ofthose workers (often where migrants work far from home, separated from support networks).Moreover, with widespread school closures in about 150 countries as of the end of May, theUnited Nations Educational, Scientific and Cultural Organization estimates that close to 1.2billion schoolchildren (about 70 percent of the global total) have been affected worldwide. Thiswill result in significant loss of learning, with disproportionately negative effects on earningsprospects for children in low-income countries.Risks to the OutlookFundamental uncertainty around the evolution of the pandemic is a key factor shaping theeconomic outlook and hinders a characterization of the balance of risks. The downturn could beless severe than forecast if economic normalization proceeds faster than currently expected inareas that have reopened—for example in China, where the recovery in investment and servicesthrough May was stronger than anticipated. Medical breakthroughs with therapeutics andchanges in social distancing behavior might allow health care systems to cope better withoutrequiring extended, stringent lockdowns. Vaccine trials are also proceeding at a rapid pace.Development of a safe, effective vaccine would lift sentiment and could improve growth outcomesin 2021, even if vaccine production is not scaled up fast enough to deliver herd immunity by the endof 2021. More generally, changes in production, distribution, and payment systems during thepandemic could actually spur productivity gains—ranging from new techniques in medicine to, morebroadly, accelerated digitalization or the switch from fossil fuels to renewables.International Monetary Fund | June 2020 9Downside risks, however, remain significant. Outbreaks could recur in places that appear tohave gone past peak infection, requiring the reimposition of at least some containmentmeasures. A more prolonged decline in activity could lead to further scarring, including fromwider firm closures, as surviving firms hesitate to hire jobseekers after extended unemploymentspells, and as unemployed workers leave the labor force entirely. Financial conditions may againtighten as in January–March, exposing vulnerabilities among borrowers. This could tip someeconomies into debt crises and slow activity further. More generally, cross-border spilloversfrom weaker external demand and tighter financial conditions could further magnify the impactof country- or region-specific shocks on global growth. Moreover, the sizable policy responsefollowing the initial sudden stop in activity may end up being prematurely withdrawn orimproperly targeted due to design and implementation challenges, leading to misallocation andthe dissolution of productive economic relationships. Some of these aspects are featured in theScenario Box, which presents growth projections under alternative scenarios.Beyond pandemic-related downside risks, escalating tensions between the United States andChina on multiple fronts, frayed relationships among the Organization of the PetroleumExporting Countries (OPEC)+ coalition of oil producers, and widespread social unrest poseadditional challenges to the global economy. Moreover, against a backdrop of low inflation andhigh debt (particularly in advanced economies), protracted weak aggregate demand could lead tofurther disinflation and debt service difficulties that, in turn, weigh further on activity.Policy PrioritiesWith the relentless spread of the pandemic, prospects of long-lasting negative consequencesfor livelihoods, job security, and inequality have grown more daunting. Further effective policyactions can help slow the deterioration of those prospects and set the stage for a speedierrecovery that benefits all in society across the income spectrum and skills distribution. At thesame time, considering the substantial uncertainty regarding the pandemic and its implicationsfor different sectors, the policy response will have to adapt as the situation evolves to maximizeits effectiveness—for instance, shifting from saving firms to facilitating resource reallocationacross sectors.As discussed in the April 2020 WEO, these policy objectives are shared across emergingmarket and developing economies as well as advanced economies, but the former group isrelatively more constrained by lower health care capacity, larger informal sectors, and tighterborrowing constraints. Moreover, some emerging market and developing economies entered thiscrisis with limited policy space. External support and strong multilateral cooperation aretherefore essential to help these financially constrained countries combat the crisis. This isparticularly the case for low-income countries. Many of these have high debt, and some arealready in a precarious security situation, with scarce food and medicine. Hence, their ability todeploy the policy response needed to prevent a devastating human toll and long-lasting impactson livelihoods depends critically on debt relief, grants, and concessional financing from theinternational community. Island economies that rely heavily on tourism and economies that aredriven by oil exports are also likely to face long-lasting challenges.10 International Monetary Fund | June 2020Resources for Health CareThe pandemic continues to test health care capacity in many countries, accelerating inemerging market and developing economies. Other countries that have passed peaks ininfections remain at risk of renewed surges. All countries therefore need to ensure that theirhealth care systems are adequately resourced. This requires additional spending as needed invarious areas, including virus and antibody testing; training and hiring contact tracers; acquiringpersonal protective equipment; and health care infrastructure spending for emergency rooms,intensive care units, and isolation wards.Multilateral cooperation to support health care systems. The international community needs to vastlystep up efforts to support national initiatives, including completing the removal of traderestrictions on essential medical supplies; sharing information on the pandemic widely andtransparently; providing financial assistance and expertise to countries with limited health carecapacity, including via support for international organizations; and channeling funding to scaleup vaccine production facilities as trials advance so that adequate, affordable doses are quicklyavailable to all countries.Contain the Economic Fallout, Facilitate RecoveryConfronted with a highly transmissible virus and susceptible populations, countries haverestricted mobility to curb its spread and protect lives. In the resulting deep economic downturn,the broad economic policy objectives remain similar to those discussed in the April 2020 WEO,with a continued emphasis on sizable, well-targeted measures that protect the vulnerable. Aseconomies reopen, the focus there should gradually move from protecting jobs and shieldingfirms to facilitating recovery and removing obstacles to worker reallocation. Elevated debt levels,nonetheless, could constrain the scope of further fiscal support—and will pose an importantmedium-term challenge for many countries.To ensure that economies are well prepared to counter further shocks, policymakers shouldconsider strengthening mechanisms for automatic, timely, and temporary support in downturns.As analyzed in the April 2020 WEO, rules-based fiscal stimulus measures that respond todeteriorating macroeconomic conditions—such as temporary targeted cash transfers to liquidityconstrained, low-income households that kick in when the unemployment rate or jobless claimsrise above a certain threshold—can be highly effective in dampening downturns.Economies where the pandemic is accelerating. In countries where lockdowns are required to slowtransmission, the emphasis should be on containing the health shock and minimizing damage tothe economy so that activity can normalize more quickly once the restrictions are lifted. Theobjective is twofold: cushioning income losses for people to the extent possible while enablingthe shift of resources away from contact-intensive sectors that will likely be persistently smallerafter the pandemic.Targeted measures, such as temporary tax breaks for affected people and firms, wagesubsidies for furloughed workers, cash transfers, and paid sick and family leave are goodcommon practices for cushioning income losses. The specific mix of targeted support should betailored to country circumstances with due consideration for those who may not be protected bythe formal safety net (as discussed below). Temporary credit guarantees, particularly for smallInternational Monetary Fund | June 2020 11and medium-sized enterprises, and loan restructuring can help preserve employmentrelationships likely to remain viable after the pandemic fades. In tandem, spending on retraining,where feasible, should be increased so that workers are better equipped to seek employment inother sectors as needed. Broader social safety nets should be enhanced, including to expandeligibility criteria for unemployment protection and provide better coverage of self-employedand informal workers.Central bank liquidity provision and targeted relending facilities for funding-affected firmscan help ensure that credit provision continues, while policy rate cuts and asset purchases canlimit the rise in borrowing costs (see the June 2020 GFSR Update for details). Publicinfrastructure investment or across-the-board tax cuts may be less effective in stimulatingdemand when large parts of the economy are shut down. Nonetheless, where financingconstraints permit, such measures can play an important role in supporting confidence andlimiting bankruptcies.Economies where reopening is underway. Many countries have begun scaling back stringentlockdowns. With reopening, policy focus must also shift toward facilitating recovery. Thisrequires progressively unwinding targeted support as the recovery gets underway, incentivizingthe reallocation of workers and resources where needed, and providing stimulus.The exit from targeted support—such as wage subsidies for furloughed workers, cashtransfers, enhanced elibility criteria for unemployment insurance, credit guarantees for firms, andmoratoria on debt service—should proceed gradually to avoid precipitating sudden incomelosses and bankruptcies just as the economy is beginning to regain its footing. The sequence inwhich the targeted measures are unwound should take into account the structure ofemployment—for instance, the share of self-employed, the distribution of firms across sectorsexperiencing different rates of recovery, and the degree of informality in the economy.Where fiscal space permits, as targeted fiscal support is unwound, it can be replaced withpublic investment to accelerate the recovery and expanded social safety net spending to protectthe most vulnerable. The former can support the transition to a low-carbon economy andmitigation strategies. The latter will be particularly important given that the pandemic has taken asignificant toll on lower-skilled workers (who may have a harder time securing reemploymentthan higher-skilled workers) and lower-income households more generally (who may not haveadequate resources to purchase health care and essentials).At the same time, hiring subsidies and spending on worker training will need to increase tofacilitate reallocation toward sectors with growing demand and away from those likely to emergepersistently smaller from the pandemic. Policymakers should also address factors that canimpede this reallocation, including barriers to entry that favor incumbents at the expense ofpotential entrants and labor market rigidities that deter firms from hiring. Easing reallocation willalso involve actions to repair balance sheets and address debt overhangs—factors that haveslowed past recoveries from deep recessions. This will require mechanisms for restructuring anddisposing of distressed debt. Such steps to reduce persistent resource misallocation andproductivity losses can further enhance the effectiveness of broader stimulus to lift aggregatedemand and boost employment.12 International Monetary Fund | June 2020Modalities for delivering relief in countries with large informal sectors. In economies where thepandemic and associated lockdowns weigh heavily on informally employed workers, digitalpayment systems can provide an alternative modality for ensuring that government reliefmeasures reach intended beneficiaries (IMF Special Series Note on COVID-19). Whereindividuals do not have IDs or access to mobile phones to avail of this channel, temporaryworkarounds can be implemented to scale up the coverage of digital payments (IMF SpecialSeries Note on COVID-19), along with complementary in-kind support of food, medicine, andother essentials staples for households in need—for example, through local governments andcommunity organizations.Multilateral CooperationConsidering the global scale of the crisis, countries must cooperate on multiple fronts tocombat the shared challenges. Besides common efforts to support health care systems, liquidityassistance is urgently needed for countries confronting health shocks and external fundingshortfalls.The G20 initiative for a temporary standstill on official debt service payments by low-incomecountries is an important first step to help them preserve international liquidity and channelresources to combat the health crisis. Private creditors should also provide comparabletreatment. More generally, it is in the best interest of all creditors and low-income country andemerging market borrowers with high debt and large financing needs to quickly agree onmutually acceptable terms of debt relief where needed.Multilateral assistance through the global financial safety net can help further cushion theimpact of funding shocks. The IMF has enhanced the access limits to its emergency financingfacilities, increased its ability to provide grant-based debt service relief, and is helping vulnerablecountries with new financing through other lending facilities. Other elements of the globalfinancial safety net have also been activated to alleviate international liquidity shortages inemerging markets, including central bank swap lines. Shared recognition that emerging marketand developing economies are generally more constrained than reserve-currency-issuingadvanced economies guides these actions. The longer the pandemic and its aftermath persist, thegreater the need to enhance efforts to support financially constrained economies.Beyond the pandemic, policymakers must cooperate to address the economic issuesunderlying trade and technology tensions as well as gaps in the rules-based multilateral tradingsystem. The eventual recovery from the COVID-19 crisis would be endangered without adurable solution to these frictions. Building on the record drop in greenhouse gas emissions thisyear (reflecting significantly lower fossil fuel use during the pandemic), policymakers shouldimplement their climate change mitigation commitments, and effort needs to be scaled up at theinternational level, ideally through equitably designed carbon taxation or equivalent schemes (seethe October 2019 Fiscal Monitor). Low oil prices also present an opportunity to reduce harmfulfuel subsidies. And the global community must act now to avoid a repeat pandemic catastropheby building global stockpiles of essential supplies and protective equipment that can bedistributed quickly to affected areas, funding research and supporting public health systems, andputting in place adequate and effective modalities for delivering relief to the neediest.International Monetary Fund | June 2020 13 0BScenario Box. Alternative ScenariosThe IMF’s G-20 Model is combined with a detailed sectoral-based analysis to estimate theimpact of two alternative scenarios: (1) a second COVID-19 outbreak in early 2021, and (2) afaster recovery from the lockdown measures implemented in the first half of 2020. Thesescenarios, which are summarized below, are presented in deviations from the June 2020 WorldEconomic Outlook (WEO) Update projections (the baseline).1BScenario 1: A Second Global COVID-19 Outbreak in Early 2021While the baseline does not rule out a possible resurgence in cases in some countries, thefirst scenario assumes instead that a second major global outbreak takes place early in 2021.The disruptions to domestic economic activity in each country in 2021—resulting frommeasures taken to contain this second outbreak—are assumed to be roughly one-half the sizeof what is already in the baseline for 2020. The halving of the impact reflects the assumptionthat containment measures will be less disruptive to firms and households because the shareof vulnerable individuals will likely be lower and the measures will become better targeted atvulnerable groups, building on the experience gained regarding the effectiveness of measuresthat have been tried to date.As a result of the second outbreak, there is assumed to be additional tightening in financialconditions in 2021, relative to the baseline. The additional tightening is about one-half of theincrease in sovereign and corporate spreads seen since the beginning of the pandemic, withadvanced economies facing, on average, relatively limited tightening, especially in sovereignpremiums, and emerging markets facing larger increases in spreads on both sovereign andcorporate debt.The simulation assumes that conventional monetary policy reacts endogenously incountries where there is still some room for further reductions in policy rates, mainly inemerging markets. Unconventional policies are not explicitly incorporated in the simulations;however, they are implicitly reflected in the limited tightening of financial conditions inadvanced economies. Regarding the fiscal policy response, it is assumed that governmentsimplement additional discretionary measures above and beyond automatic stabilizers. As aresult, the overall spending response to the decline in output is twice as strong as the responseunder typical business cycle fluctuations.Despite the policy response, the outbreak is assumed to cause further longer-lived damageto the supply side of economies (scarring) starting in 2022, as increased bankruptcies lead tocapital destruction, temporary slowing in productivity growth, and a temporary increase intrend unemployment. The additional scarring is assumed to be about one-half the size of whatis already in the baseline, with emerging markets experiencing greater, longer-lived damagethan advanced economies, given the more limited policy space to support incomes in thosecountries. 14 International Monetary Fund | June 2020 2BScenario 2: A Faster RecoveryThe baseline projection assumes a gradualrecovery in activity starting in the second half of2020. In the second scenario, it is assumed that therecovery is faster than expected, as greaterconfidence in efficient post-lockdown measures(social distancing and more effective testing,tracing, and isolation practices) lead to effectivecontainment and less precautionary behavior byhouseholds and firms once the lockdowns arelifted.0F1 As a result of the faster recovery, financialconditions become more accommodative; forsimplicity, the loosening of financial conditionsstarts in 2021. It is also assumed that thediscretionary fiscal measures already included in thebaseline are maintained in their entirety; that is,there is no partial rollback in response to theimproved outlook. However, automatic stabilizerswould imply less fiscal support overall as theyrespond endogenously to a faster dissipation ofexcess supply. The faster recovery also impliesthere is 50 percent less supply-side scarring than inthe baseline starting in 2021.3BResultsResults are presented in Scenario Figure 1 forthe world and advanced economy/emergingmarket groups. In the event of a second outbreak(red line in Scenario Figure 1), the resultingcontainment measures lead to a decrease in worldoutput of about 4.6 percent in 2021, relative to thebaseline. As in the scenarios presented in the April2020 WEO, the decrease in activity is broadlysimilar for advanced and emerging marketeconomies in the short term (2021): on one hand,advanced economies have a relatively larger shareof services and are thus more directly exposed tosocial-distancing measures; on the other hand,tighter financial conditions and more limited fiscal responses in emerging markets amplify theimpact in those economies. The hit to activity in 2021 is only partially corrected in 2022, with 1 The second scenario does not assume that a vaccine is made available before the end of 2021.–6–4–26 4 2 02019 20 21 22 23 24–6–4–26 4 2 02019 20 21 22 23 24–15–10–55 010152019 20 21 22 23 24Scenario Figure 1. June WEO 2020 AlternativeScenarios(Deviation from baseline)–6–4–26 4 2 02019 20 21 22 23 241. World Real GDP (percent) 3. AEs Real GDP (percent) 4. EMs Real GDP (percent) 2. Real Oil Price (percent) Source: IMF, G-20 Model simulations.Note: AEs = advanced economies; EMs = emerging marketeconomies.Faster Recovery Starting in the Second Half of 2020Second Outbreak in 2021–10–55 0101520252019 20 21 22 23 24–10–55 0101520252019 20 21 22 23 24–48 4 01216202019 20 21 22 23 24–48 4 01216202019 20 21 22 23 245. AEs Government Spending/GDP(percentagepoints) 7. AEs Government Debt/GDP(percentagepoints) 8. EMs Government Debt/GDP(percentagepoints) 6. EMs Government Spending/GDP(percentagepoints) International Monetary Fund | June 2020 15 global output still 3.3 percent below the baseline, partly due to the additional supply-sidescarring.Under the alternative scenario, in which efficient post-lockdown measures in the secondhalf of 2020 better contain the virus and generate greater confidence and a more rapid returnto normal (blue line in Scenario Figure 1), global output improves relative to the baseline byabout one-half percent in 2020. The recovery picks up steam in 2021, with global output 3percent above baseline, and with the relative loosening of financial conditions and the reducedscarring both contributing to the faster recovery.It is important to stress the considerable uncertainty surrounding these scenarios, especiallyScenario 1. The second outbreak could take place in the fall, in which case the negative impacton activity in 2020 would be even larger than in the current baseline. In addition, while thequantitative implications of current containment measures remain to be fully ascertained, theimpact of a hypothetical second round is even more uncertain. Finally, a second outbreakcould lead to a more severe tightening of financial conditions than assumed here, with theoverall macroeconomic effect possibly amplified by nonlinearities stemming from greaterscarring and financial pressures, especially in emerging markets. 16 International Monetary Fund | June 2020Annex: Update of Fiscal Developments andthe OutlookAs the economic fallout from the COVID-19 pandemic and the Great Lockdown has become more severe,many governments have stepped up their emergency lifelines to protect people, preserve jobs, and preventbankruptcies. The steep contraction in economic activity and fiscal revenues, along with the sizable fiscal support,has further stretched public finances, with global public debt projected to reach more than 100 percent of GDPthis year. As the lockdowns are unwound in many countries, policy focus needs to shift toward facilitating recovery,although uncertainty about the containment of the pandemic remains, and elevated debt could constrain the scopeand effectiveness of further fiscal support. This annex updates the April 2020 Fiscal Monitor on fiscalmeasures in response to the pandemic, as well as the fiscal outlook.1F1More than two-thirds of governmentsacross the world have scaled up their fiscalsupport since April to mitigate the economicfallout from the pandemic and the stringentlockdowns as growth is revised further downrelative to the April 2020 World EconomicOutlook. These measures have helped savelives, protect livelihoods, and preserveemployment and business relations.Announced fiscal measures are now estimatedat near $11 trillion globally, up from $8 trillionestimated in the April 2020 Fiscal Monitor. Onehalf of these measures ($5.4 trillion) areadditional spending and forgone revenue,directly affecting government budgets.2F2 Theremaining half ($5.4 trillion) is liquiditysupport, such as loans, equity injections, andguarantees, including through state-ownedbanks and enterprises, which help maintaincashflows and limit bankruptcies, but couldadd to government debt and deficits down theroad if these public interventions incur losses.The Group of Twenty (G20) economiescontinue to account for the bulk of the globalfiscal support, with budget measures nowstanding at 6 percent of GDP on average(Annex Figure 1), compared with just 3percent of GDP in April, and much higherthan during 2008–10 in response to the global financial crisis.1 This annex was prepared by the Fiscal Affairs Department.2 See the Fiscal Monitor Database of Country Fiscal Measures in Response to the COVID-19 Pandemic for details.5 0101520253035408 6 4 2 01012TurkeyMexicoIndiaRussiaSaudi ArabiaIndonesiaFranceArgentinaKoreaSpainItalyChinaSouth AfricaCanadaUnited KingdomBrazilAustraliaGermanyJapanUnited StatesLIDCsEMsG20AEsAnnex Figure 1. Country Fiscal Measures in Response to theCOVID-19 Pandemic(Percent of GDP)Sources: National authorities; and IMF staff estimates.Note: Data are as of June 12, 2020. Country groups are weighted by GDP inpurchasing power parity-adjusted current US dollars. Revenue and spendingmeasures exclude deferred taxes and advance payments. For details, see theFiscal Monitor Database of Country Fiscal Measures in Response to the COVID-19Pandemic. AEs = advanced economies; EMs = emerging markets; G20 = group oftwenty economies; LIDCs = low-income developing countries.Additional spending and forgone revenueLoans, equity, and guaranteesCountries are providing sizable fiscal support through budgetary measures, as wellas off-budget liquidity.(right scale)17 International Monetary Fund | June 2020Government Debt and Deficits at the Global LevelThe steep contraction in output andensuing fall in revenues, along withsizable discretionary support, have led toa surge in government debt and deficits(Annex Figure 2). Under the baselinescenario, global public debt is expectedto reach an all-time high, exceeding 101percent of GDP in 2020–21—a surge of19 percentage points from a year ago(Annex Table 1). Meanwhile, the averageoverall fiscal deficit is expected to soar to14 percent of GDP in 2020, 10percentage points higher than last year.Beyond discretionary fiscal measures, automatic stabilizers from taxes andsocial protection are expected to helpcushion the fall in household incomesduring the recession, but also tocontribute to one-third of the rise in–5–4.9–15–10 deficits on average. In particular,government revenues are expected to fallmore than output and projected to be2½ percentage points of GDP lower, onaverage, than in 2019, reflecting lower personal and corporate incomes and hard-hit privateconsumption. In addition, oil-exporting countries have suffered from a decline in oil revenueowing to low oil prices. The trajectory of debt and deficits is subject to high uncertainty andcould drift up in an adverse scenario if activity disappoints from a resurgence in infections or ifcontingent liabilities from large liquidity support materialize when financing conditions tighten.3F3Revenues could also fall more if deferred collections are not recovered in full. Public financescould deteriorate less than forecast if safe and effective vaccines become available later this year,restoring confidence and mitigating the downturn.Fiscal Developments and Outlook by Country Income GroupsMost advanced economies have enacted further rounds of fiscal support as activity contractedmore than expected. Overall fiscal deficits are now projected to widen to 16½ percent of GDPon average this year, 13 percentage points higher than last year, and government debt is set toexceed 130 percent of GDP during 2020–21. The large liquidity support in some advancedeconomies (France, Germany, Italy, Japan, United Kingdom) creates fiscal risks in the event ofsubstantial take-up and losses. Borrowing costs, nonetheless, are expected to remain low inadvanced economies. In terms of fiscal support, the United States approved another package3 See the Scenario Box for a summary of alternative scenarios and their growth implications in the G20 economies.Source: IMFstaff estimates.Annex Figure 2. Change in Global Government Debt andOverall Fiscal Balance(Percent of GDP)5 010152025 08 09 10bal financialcrisisGovernm19 20 21COVID-19pandemicent debt2008 09 10Global financialcrisisOverall fisc19 20 2COVID-19pandemical balance 10.518.7–10.0Government debt and deficits are set to rise globally, more so than during2008–10 following the global financial crisis.18 International Monetary Fund | June 2020($483 billion, or 2½ percent of GDP) in late April, providing additional forgivable loans to smalland medium-sized enterprises. Further support amounting to $3 trillion is pending legislativeapproval to fund subnational governments and additional cash transfers. Japan rolled out amassive package of $1.1 trillion (22 percent of GDP) in late May, amounting to over 40 percentof GDP when combined with measures decided in April. The package includes expandedconcessional loans to affected firms. Germany announced a new package (€130 billion, or 4percent of GDP, over 2020–21) in June to support the recovery, with measures to boost activityin green and digital economies. The European Union has proposed an additional €750 billion (6percent of its GDP) in support over 2021–27, including a grant-based recovery fund, which, ifapproved, could promote green recovery and reduce the uneven impact of the pandemic onmember states’ debt sustainability.In emerging market economies, the average fiscal response to the pandemic is now estimated at 5percent of GDP, sizable but less than in advanced economies. Yet fiscal deficits are projected towiden sharply to 10½ percent of GDP on average in 2020, more than double the level last year.This reflects the fiscal expansion, steep output contraction, lower commodity revenues, andhigher external borrowing costs, as global financial conditions remain tighter than they werebefore the crisis despite recent easing (see the June 2020 Global Financial Stability Report Update).Government debt is now projected to average 63 percent of GDP in 2020, continuing itsupward trend with a 10 percentage point surge from a year ago. Many emerging markets havescaled up their support. India has unveiled liquidity support (4½ percent of GDP) through loansand guarantees for businesses and farmers and equity injections into financial institutions andthe electricity sector. South Africa has temporarily expanded its unemployment support andtransfers to vulnerable households. As activity begins to recover, China has continued to focuson vulnerable firms and households, including through the expansion of the social safety net,medical facilities, and digital infrastructure.As many low-income developing countries face tight financing constraints and a less severe impactof the pandemic thus far, the fiscal response to the pandemic has been modest, at 1.2 percent ofGDP on average, and mostly through budgetary measures. For example, Nigeria provided taxrelief for employers to retain workers and raised health care spending (0.3 percent of GDP),while Ethiopia has expanded its in-kind provision of food and shelter (1.8 percent of GDP).Support measures in Vietnam have included cash transfers to the poor and higher benefits inexisting social protection programs (1.2 percent of GDP). As a result, the headline deficit forlow-income developing countries is projected to widen to 6 percent of GDP in 2020, 2 percentagepoints higher than last year, and much higher for oil exporters. Within the group, manycountries have requested a suspension of official bilateral debt repayment under the G20 DebtService Suspension Initiative, and 45 countries have sought IMF emergency financing. Whilethese provide temporary relief, elevated public debt—exceeding 48 percent of GDP on averageduring 2020–21—has raised sustainability concerns in many countries.19 International Monetary Fund | June 2020Fiscal Policies Going ForwardAs the Great Lockdown begins to ease in several parts of the world, fiscal policies will haveto adapt to country circumstances, balancing the need to protect people, stabilize demand, andfacilitate recovery. Where the pandemic remains acute and stringent lockdowns continue, fiscalpolicies should accommodate health care services to save lives and provide emergency lifelinesto protect people. Where lockdowns are easing, fiscal policies should gradually transition awayfrom firm support to better targeted household support, taking into account the extent ofinformality in the economy. Employment support measures will need to encourage safe returnto jobs and facilitate structural shifts in labor markets for a more resilient post–COVID-19economy. Once the pandemic is under control, broad-based fiscal stimulus to support therecovery could focus on public investment, including on physical and digital infrastructure,health care systems, and the transition to a low-carbon economy. Where fiscal space is limited,countries need to reorient revenue and spending to increase and incentivize productiveinvestment. Making some provisions (for example, relaxing eligibility) of social protectionprograms more long-lasting can enhance automatic stabilizers and help tackle rising poverty andinequality. All measures should be embedded in a medium-term fiscal framework andtransparently managed and recorded to mitigate fiscal risks, including loans and guarantees thatdo not have an immediate effect on government debt and deficits.20 International Monetary Fund | June 2020Annex Table 1. General Government Fiscal Balance and Gross Debt, 2018–21: Overall Balance and Gross Debt(Percent of GDP)2018 2019 2020 2021 2020 2021 2018 2019 2020 2021CurrentProjectionsDifference from April WEOProjections2020 2021 World -3.1 -3.9 -13.9 -8.2 -4.0 -2.0 81.2 82.8 101.5 103.2 5.1 6.6Group of Twenty (G20) -3.7-2.7-3.3-5.8-0.51.9-2.3-2.2-2.5-2.5-2.2-0.4-1.22.6-3.8-4.0-4.3-4.5-4.7-6.3- -15.4-3.3 -16.6-4.0 -18.0-9.1-8.3-9.1-4.6-6.0-6.5-8.4-4.2-5.2-4.5-4.4-4.4-7.6-4.4-0.81.1-1.7-1.5-1.6-1.6-1.5-0.9-4.6-1.3-0.7-0.6-0.9-3.6-6.6- -23.8 -12.4-0.6 -11.71.5 -10.7-3.0 -13.6-1.6 -12.7-2.8 -13.9-3.3 -14.7-2.1 -12.7-0.3 -12.6-5.3-3.1-7.1-7.0-8.3-6.1-6.7-5.8-8.4-2.4-8.5-8.5-9.1-9.8-3.90.4-8.6-3.6-4.9 -10.6-5.0 -10.6-5.4 -11.3-6.0 -11.4-6.3 -12.1 -10.7-7.9 -12.1-9.4-5.0-4.8-3.9-7.5-4.8-5.9-4.0-7.8-5.6-2.2-0.61.9-5.3-6.3-6.9-5.5-8.4-4.0 -10.3-6.0 -16.0-2.3-3.9-6.0-9.8-4.5 -11.4-6.3 -14.8 -11.0-4.1-5.0-1.0-6.1-7.3-8.4-5.1-5.7-5.5 88.6 90.4 111.2 113.3 5.7 7.5Advanced Economies 104.0 105.2 131.2 132.3111.6 113.2 141.4 142.9106.9 108.7 141.4 146.185.8 84.1 105.1 103.061.9 59.8 77.2 75.098.1 98.1 125.7 123.8134.8 134.8 166.1 161.997.6 95.5 123.8 124.1236.6 238.0 268.0 265.485.7 85.4 101.6 100.589.7 88.6 109.3 108.841.5 45.0 56.8 64.340.0 41.9 49.5 53.448.9 52.4 63.1 66.750.4 53.9 64.4 68.149.4 53.0 64.1 68.349.3 53.5 64.9 70.347.0 52.0 64.1 70.769.6 72.2 84.0 85.730.1 30.5 37.7 40.329.3 29.0 36.4 37.113.5 13.9 18.5 18.830.4 33.0 40.4 42.266.6 70.6 81.5 79.787.1 89.5 102.3 100.653.6 53.7 65.9 66.340.1 44.7 55.2 56.419.0 22.8 35.2 36.856.7 62.2 79.9 84.642.9 43.1 48.2 49.027.7 29.1 36.5 36.842.7 45.1 56.1 56.610.4 14.27.7 7.48.6 9.310.2 7.410.6 11.410.4 9.5 8.8 10.4Advanced G20 9.6 11.5United States1, 3 Euro Area Germany France Italy Spain2 Japan 16.0 17.8United Kingdom 5.9 4.7Canada3 -0.3 0.3Australia -2.5 0.3Korea 3.2 4.3Emerging Market Economies 1.1 2.1Excluding MENAP Oil Producers 0.9 2.0Emerging G20 0.8 1.8Asia 0.8 2.3China -0.8 0.6India 9.6 11.9Indonesia 0.8 2.8Europe 0.0 0.8Russia 0.6 1.7Turkey 1.1 1.5Latin America 3.6 3.6Brazil4 4.1 2.4Mexico 4.6 7.3MENAP 4.0 3.6Saudi Arabia 1.1 -1.9South Africa 2.5 -1.0Low-Income Developing Countries 0.8 1.3Nigeria 1.2 -0.1Oil Producers 1.5 2.2MemorandumWorld Output (percent) 3.6 2.9 -4.9 5.4 -1.9 -0.3Overall Fiscal Balance Gross DebtCurrentProjectionsDifference from April WEOProjectionsSource: IMF staff estimates and projections.Note: All country averages are weighted by nominal GDP converted to US dollars (adjusted by purchasing power parity only for world output) at averagemarket exchange rates in the years indicated and based on data availability. Projections are based on IMF staff assessments of current policies. In manycountries, 2020 data are still preliminary. For country-specific details, see “Data and Conventions” and Tables A, B, C, and D in the April 2020 Fiscal MonitorMethodological and Statistical Appendix. MENAP = Middle East, North Africa, and Pakistan; WEO = World Economic Outlook.1 For cross-country comparability, expenditure and fiscal balances of the United States are adjusted to exclude the imputed interest on unfunded pensionliabilities and the imputed compensation of employees, which are counted as expenditures under the 2008 System of National Accounts (2008 SNA) adoptedby the United States but not in countries that have not yet adopted the 2008 SNA. Data for the United States in this table may thus differ from data published bythe US Bureau of Economic Analysis.2 Including financial sector support.3 For cross-economy comparability, gross debt levels reported by national statistical agencies for countries that have adopted the 2008 System of NationalAccounts (Australia, Canada, Hong Kong SAR, United States) are adjusted to exclude unfunded pension liabilities of government employees’ defined-benefitpension plans.4 Gross debt refers to the nonfinancial public sector, excluding Eletrobras and Petrobras, and includes sovereign debt held by the central bank.


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