Virus resurgence poses biggest risk to US economy, warns IMF – Gulf Today

Virus resurgence poses biggest risk to US economy, warns IMF – Gulf Today

Virus resurgence poses biggest risk to US economy, warns IMF

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Picture used for illustrative putpose. File

The dominant risk to the US economic recovery is a resurgence of COVID-19 cases that would force renewed business shutdowns, the International Monetary Fund warned on Friday.

The US government will need to do more in coming months to provide support to households and boost demand, as well as address worsening poverty and the shortcomings of the US health system, the IMF said in its annual Article IV report on the world's biggest economy.

"Even with the unprecedented policy support being provided to the economy,“ the US suffered a 37 per cent collapse in GDP in the second quarter, and the economy is expected to contract by 6.6 percent in 2020, the fund said, stressing the "tremendous uncertainties“ surrounding the outlook.

"The principal risk, and one that is the most difficult to quantify, is that a resurgence in the number of COVID-19 cases in the US could lead to renewed, partial shutdowns,“ the report said.

With case counts spiking in states like Florida, Georgia, Texas and California, local authorities already have reimposed some restrictions.

And the IMF warns that the brunt of the economic impact is being borne by