The International Monetary Fund has painted grim prospects of the global economy amid the coronavirus pandemic that is disrupting the supply chain. It forecasts the specter of the deepest recession in a century and concedes things could get worse, depending on how the pandemic pans out.
The funding institution sees the recession trimming $9 trillion from the world economy this year but expects a rebound of 5.8 percent in 2021. Still, the IMF is cautious on its 2021 outlook because of the rapidly changing situation.
The global economy has virtually shut down, following the efforts of every government to restrain the spread of the virus and prevent health systems from collapsing. The IMF is still wary despite the quarantine measures in place across the globe. It warned "severe risks of a worse outcome" because of the "extreme uncertainty around the strength of the recovery."
Cumulative loss of the global gross domestic product over 2020 and 2021 from the pandemic crisis, according to the IMF, could total round $9 trillion, “greater than the economies of Japan and Germany combined."
"Much worse growth outcomes are possible and maybe even likely," the IMF report warns, "if the pandemic and containment measures last longer… or if widespread scarring effects emerge due to firm closures and extended unemployment."
The Philippine economy is not excluded from the global economic downturn. The IMF downgraded its 2020 growth forecast for the Philippines to 0.6 percent, or virtually flat, from a previous estimate of 6.3 percent. The multilateral institution, however, is upbeat at the same time on its forecast for the Philippine economy next year, predicting a strong rebound of 7.6 percent.
The Philippine economic recovery, as the IMF sees it, should be premised on a healthy population. IMF resident representative to the Philippines Yongzheng Yang said government policies should “focus on both protecting public health and putting people back to work, but getting the virus under control is, if anything, a prerequisite to saving livelihoods.”
Philippine policy makers can take a cue from IMF's assessment. The protection of public health must be paramount. The people, after all, are the greatest asset of the economy.