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Home / World News / IMF says coronavirus may shrink global imbalances further in 2020

IMF says coronavirus may shrink global imbalances further in 2020

The IMF’s annual report on currencies, the External Sector Report, showed that continued weakness in trade, coupled with massive fiscal expansion, was projected in many countries to shrink both current account deficits and surpluses.

world Updated: Aug 04, 2020, 19:30 IST
Reuters | Posted by Arpan Rai
Reuters | Posted by Arpan Rai
Washington
A woman wearing a mask to curb the spread of the coronavirus walks past a street vendor selling lotus flowers and seeds in Beijing on Frida.
A woman wearing a mask to curb the spread of the coronavirus walks past a street vendor selling lotus flowers and seeds in Beijing on Frida. (AP)

The International Monetary Fund said on Tuesday that global current account imbalances narrowed in 2019 as trade slowed, and the coronavirus could narrow them further in 2020, but some vulnerable emerging market economies are facing major investment outflows.

The IMF’s annual report on currencies, the External Sector Report, showed that continued weakness in trade, coupled with massive fiscal expansion, was projected in many countries to shrink both current account deficits and surpluses.

The Fund said net current account balances fell by 0.2 percentage point to 2.9% of global GDP, and could narrow by 0.3% of global GDP in 2020, though the outlook is highly uncertain.

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