According to the International Monetary Fund’s April 2021 World Economic Outlook (WEO) report, the global economy suffered an unprecedented contraction during the year 2020 due to the COVID-19 pandemic, yet noted that said slowdown could have been much worse. In details, the IMF estimates that had it not been for the global stimulus packages, the contraction could have been larger by around 300%. The report unveiled that the toll of the virus was much heavier for countries that rely on tourism and commodity exports as well as for those with a low ability to respond to the crisis. Looking forward, the IMF commented that the global outlook is still clouded, and highly dependent on the progression of the COVID-19 virus, yet highlighted that economies have already started adapting to the pandemic. In this regard, the report unveiled that the global economy contracted by 3.3% in 2020, less than previously estimated in the October 2020 WEO update (-4.4%), mainly on the back of relaxed lockdown measures. Delving further into details, the IMF reported economic contractions of 3.5% in the United States, 6.6% in the Euro area, 9.9% in the United Kingdom, and 4.8% in Japan during the year 2020, with the growth in emerging markets and developing economies standing at -2.2% in 2020. The IMF projects world economic growth to reach 6.0% in 2021 before slowing to 4.4% in 2022, noting that said growth rates outperform previous estimates of 5.2% for 2021 and 4.2% in 2022, mainly on the back of additional anticipated support in large economies coupled with the rollout of the vaccine. In this vein, the report projected economic growth in 2021 to rebound to 6.4% in the United States, 4.4% in the Euro area, 3.3% in Japan, 5.3% in the UK and 6.7% for emerging markets and developing economies. The IMF also anticipated global growth to settle at around 3.3% over the medium term, owing to damages to the supply chain and other factors that prevailed before the pandemic such as the slower growth in the labor force in advanced and some emerging market economies.

On the regional front, the WEO report projected an economic contraction in the Middle East & Central Asia (MECA) region of 2.9% in 2020 and a real growth of 3.7% in 2021 and 3.8% in 2022. Growth forecasts for the MECA region were revised from -4.1% for 2020 and 3.0% for the year 2021 in the IMF’s October 2020 WEO report.

Locally, the IMF estimated that the Lebanese economy contracted by 25% in 2020, unchanged from its October 2020 WEO report. The IMF did not provide growth estimates for Lebanon for the years 2021-2025 citing the high degree of uncertainty surrounding the outlook of the Lebanese economy. It also estimated the country’s current account deficit to GDP ratio at -14.3% in 2020.