The International Monetary Fund is concerned that the world economy will suffer amidst the ongoing climate crisis.
IMF cuts down growth forecast for 2020-2021
Source: IMF’s World Economic Outlook
The warning came as the IMF said that in 2020, the global economy would grow by an estimated 3.3%, down from a previous forecast of 3.4%. Growth is expected to be 0.2 percentage points lower than originally projected at 3.4 percent in 2021.
The major reasons for this fall have been attributed to the following:
- Weather-related disasters, storms, floods, wildfires, heatwaves, and droughts have increased in the recent past. This has led to the loss of livelihood in many regions of the world.
- The ongoing tussle between the US and Iran will spread more unrest in the already volatile Middle East.
- Protectionist trade policies that harm the climate are also mentioned
- Cross border migrations are putting stress on already economically affected regions
- This downward trend is also attributed to economic surprises sprung by emerging economies like India
- The growing debt crisis is creating uncertainty and limiting business investment in various sectors of the world economy
- Trade friction between China and the US is also responsible that also include other countries
Concluding the meet at Davos, it was agreed that a more cohesive approach to tackle climate change and revamp the world economy is the need of the hour.