(Bloomberg) -- The International Monetary Fund reiterated that global economic growth appears to be bottoming out, though also cautioned that risks including the coronavirus dominate the outlook.
“After a marked slowdown last year, global economic activity is expected to moderately strengthen in 2020,” the IMF said in a surveillance note released Wednesday. “Monetary and fiscal policy actions were instrumental in supporting activity, thus avoiding a deeper downturn.”
The latest report is being issued ahead of this week’s meeting of finance ministers and central bankers at a Group of 20 summit in the Saudi capital, Riyadh. Policy makers worldwide are grappling with an unprecedented virus outbreak in China that now looms over the global economy just after a cooling of trade frictions last year. The IMF produces surveillance notes to help inform G-20 meetings.
“Downside risks to the outlook continue to dominate,” the IMF said, noting that a further spread of the coronavirus or renewed trade tensions could help derail any recovery. The outbreak “is disrupting economic activity in China as production has been halted and mobility around affected regions limited.”
The IMF said about a month ago in its latest world economic outlook that the global economy will likely strengthen in 2020, albeit at a slightly weaker pace than previously anticipated amid trade threats and Middle East tensions. That report was released Jan. 20, before travel was halted in Wuhan, China, where the virus originated.
Read more: IMF Trims Global Growth Outlook But Tones Down Risk Warnings
The fund on Wednesday left unchanged its January projection that global growth will accelerate to 3.3% this year from 2.9% in 2019.
China’s short-term outlook largely depends on containing the virus, and the disruption may be followed by a period of stronger catch-up growth as in past disruptions such as the SARS outbreak of the 2000s, the IMF said in its surveillance note.
IMF Managing Director Kristalina Georgieva reiterated in a Bloomberg Television interview Sunday that the most likely scenario is for a V-shaped recovery in China and that the country has taken “very aggressive” measures to contain the impact.
Georgieva also said she’s hopeful for a synchronized global response to the risks facing the world economy. “I am quite optimistic that in very difficult moments we would see the appetite for more coordinated action,” Georgieva said.