As COVID-19 cases surge across 27 US states this week, the IMF revised its 2020 global economic contraction forecast today to -4.9% (from -3% in April) thanks to a larger-than-anticipated supply shock and an ongoing hit to demand from social distancing and other safety measures. Dubbing it a “crisis like no other” the report notes that if safety measures are not followed effectively, longer lockdowns will take an even greater toll on global growth.

While noting that financial markets have improved in the second quarter, they add that the rebound “appears disconnected from shifts in underlying economic prospects” and at risk of reversal.

They further warn that more than 90% of emerging-market and developing economies are forecast to show declines in per capita income this year and this huge hole is unlikely to be filled in the foreseeable future.

Former OECD Chief economist Catherine Mann discussed the IMF report and her own outlook on Bloomberg this morning and warned that 60% of the world will not see a recovery to 2019 GDP levels before 2022, with recovery to 2019 employment levels not apparent in the forecast horizon.

Catherine Mann, global chief economist at Citigroup, discusses what she’s watching in global GDP for the third-quarter and beyond, and the “fear factor” that could hold back consumers. Here is a direct video link.