London — The IMF’s World Economic Outlook Update for June is not a cheerful document. Yet it does contain a cheerful point: the second quarter of 2020 should be the nadir of the Covid-19 economic crisis. If so, the challenge is to produce the best possible recovery.

The downgrade of the IMF’s forecasts since April is large, with global growth forecast at -4.9% this year, down from -3% in April. Next year’s growth is forecast to be 5.4%. Global output thus is expected slightly to exceed 2019 levels in 2021. Yet, in the fourth quarter of 2021, the GDP of high-income countries would still be below levels in the first quarter of 2019. Output would also be about 5% below levels implied by pre-Covid-19 growth trends.

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