According to IMF’s latest June projections, all regions in the world will be recession for the first time ever. In their last update in April, Emerging and Developing Asia was projected to grow at 1.0% but now it is estimated to shrink by 0.8%.
Comparing IMF’s April and June projections, the biggest revision across all regions has come in Latin America and Caribbean which is estimated to further contract by 4.2 percentage points. In terms of overall decline in economic output, Euro Area will witness the highest contraction in 2020 with a projected decline of 10.2%.
China, for instance, is projected to grow by 1.0% owing to the continued recovery from the decline in Q1 2020 and due to its policy stimulus. On the other hand, India’s GDP is projected to shrink by 4.5% due to the longer period of lockdown and slower than anticipated recovery in April. For Brazil and Mexico, Latin America’s two largest economies, new cases of the infection are still growing and the need right now is of containing the further spread. As a result, Brazil’s economy is projected to shrink by 9.1% while that of Mexico will contract by 10.5% in 2020. Finally, the sharp decline in fuel price is driving recession for oil exporters including Russia, Saudi Arabia and Nigeria whereas South Africa is facing a health crisis.