The International Monetary Fund (IMF) forecasts a 1% growth for China's GDP in 2020, but a much steeper global economic recession and a slower recovery from this downturn for the rest of the world compared to its current estimates, which are already bleak as it is. It also said recovery from the economic paralysis induced by the COVID-19 pandemic will be slow and gradual.

On Wednesday, the IMF estimates global GDP will shrink by 4.9% this year. This is a far worse assumption than the one it made in April, when it forecast a 3% contraction.

The gloomier IMF report, however, is more optimistic than those put forward by the World Bank and the Organization for Economic Cooperation (OECD), which recently forecast global GDP to contract by 5.2% and 6%, respectively. The IMF's new estimates show the poorest will still suffer the most from the pandemic-induced economic deceleration.

The IMF attributes China's GDP growth to its having exited the COVID-19 pandemic earlier than most countries and the strong support from the Chinese central government in fighting the pandemic.

In contrast, the IMF forecasts the United States' economy to shrink a massive 8%, while economic growth in the 19-nation eurozone might plunge by an even larger 10.2%. A 4.5% contraction is estimated for India in light of a far longer lockdown and slower-than-expected recovery complicated by security issues with China.

The two largest economies in Latin America are expected to do badly this year. Brazil's economy is expected to see a massive 9.1%. Mexico is poised to contract by an even larger 10.5%.

The IMF said the COVID-19 pandemic is causing an "unprecedented decline in global activity." It also warns the global labor market has taken a "catastrophic" hit, which makes any full economic recovery all the more difficult. It also noted that economic recovery will be hindered by companies slashing investments and consumers spending far less than they did before the pandemic erupted in January.

The IMF pointed to the COVID-19 pandemic "has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast."

The IMF expects the global economy to resume growth and hit 5.4% in 202. This estimate, however, is still 6.5 percentage points below its pre-coronavirus projections. On the other hand, any growth will depend heavily on ongoing stimulus support. The IMF revealed global governments have announced nearly $11 trillion in fiscal measures so far this year.