In its latest analysis, the International Monetary Fund said Tuesday that the global economy should shrink 4.9% this year, a greater drop than its earlier prediction of a 3% contraction.
For 2021, the IMF is anticipating growth of 5.4%, down from 5.8%. The world economy’s cumulative loss for this year and next could hit $12.5 trillion, according to a Bloomberg report.
The United States’ economy is expected to contract by 8% this year, up from the IMF’s prior estimate of 5.9%.
The Dow and S&P 500 closed down more than 2.5%, with the NASDAQ off 2.2%.
“The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast,” the report explained.