ECB Leaves Rates Unchanged, First Strategic Review of Policy Since 2003

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ThePitBoss
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IMF sees EuroZone hit hardest

When speaking to CNBC, IMF’s Gopinath said: “When you have a deep recession of this kind, there is always unfortunately tremendous loss of income for people at the lower end of the income scale, so poverty can go up, inequality can go up.”

The latest forecasts from the IMF suggest that the U.S. economy will contract by 5.9% this year. In comparison, the euro zone is expected to shrink by 7.5%, but China is seen growing by 1.2% in 2020.

The economic situation will be particularly difficult in Italy and Spain, where GDP is set to contract by 9.1% and 8%, respectively. These two countries are the worst hit in Europe by Covid-19. Both have higher numbers of infections and deaths than China, where the virus first emerged in late 2019.

The IMF is advising countries to focus on the health crisis first, by spending on testing, medical equipment and other health care related costs.

It also said that governments should provide tax deferrals, wage subsidies and cash transfers to the most-affected citizens and firms; as well as to prepare for the lifting of lockdown measures.