Economic Growth Current Affairs - 2020

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IMF: Recession due to COVID-19 to be worse than 2009

On March 24, 2020, the International Monetary Fund announced that the recession to be caused due to Corona Virus is to be worse than the 2009. IMF has specifically warned the G20 nations that the current economic outlook is towards negative. The G20 nations are to hold a virtual summit in a week to come out with a global solution to combat Corona Virus.

Highlights

The IMF says that currently the shutdown has now brought the world to 1.5% downturn. Marking this, the investors have already removed their investments from emerging markets. And this has accounted to 83 billion USD.

Also, the outlook for global growth for the 2020 year is negative.

IMF Relief Measures

In order to fight Corona Virus, IMF is to deploy 1 trillion USD. More than 80 countries have requested emergency funds from IMF.

2008 Crisis

During the 2008 Financial Crisis, the Global Economy had contracted to 0.6% in 2009 according to IMF. However, the emerging markets like India and China were growing rapidly.

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Corona Virus: US Federal Reserve reduces interest rate to 0%

On February 16, 2020, the United States Reserve Bank announced that the key interest rates are to be slashed to 0% to 0.25%. This is being done in response to growing impact of Corona Virus.

Highlights

This is the second emergency cut by the reserve bank in less than two weeks. Similar rate cuts were made by the bank earlier only during 2008 global financial crisis.

Global Impacts of Corona Virus

The Global Economy has been badly hi due to Corona Virus. With countries imposing travel ban and business meets and industrial summits being postponed, the global market is hit badly. After China, Spain has shut down its communication with the external world.

Global Economic Slow Down

The Organization of Economic Cooperation and Development downgraded world GDP growth. Earlier its was predicted that GDP growth for the year 2020 will be 3%. Now it has been reduced to 2.5%

Manufacturing Sector

The Purchasers Managers Index that was between 45 and 55 for the global powers has reduced to 40 and 50. Of all the China’s manufacturing powers were hit hard. This has affected Vietnam, South Korea and Singapore.

Oil Prices

With OPEC’s unable to succeed its deal in cutting oil production, the oil prices have lowered. This has hit oil industries greatly.

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