IMF sees rebound in 2021, but with less bounce than it did before
THE International Monetary Fund (IMF), an inter-governmental international lender of last resort, recently downwardly revised its 3
THE International Monetary Fund (IMF), an inter-governmental international lender of last resort, recently downwardly revised its 3.0 per cent projected recession for 2020 downwards to -4.9 per cent, reports Sea-Intelligence.
For 2021, the IMF sees a rebound, although the 5.8 per cent growth projection from April has been revised down to 5.4 per cent.
'This means that, should these figures hold true, 2021 will see us back at the 2019 levels of GDP growth. This is materially worse than the projection in April, which had 2021 up by 2.6 per cent over 2019,' said Sea-Intelligence CEO Alan Murphy.
From a container shipping perspective, a few elements are particularly important, he said. The IMF contraction in world trade that was previously projected at -11 per cent is now down to -11.9 per cent for 2020, with the 2021 rebound revised down from 8.4 per cent to 8.0 per cent.
'The euro area saw GDP growth projections drop from an already low -7.5 per cent to -10.2 per cent. This is especially concerning since the region will drive demand to fill the newest generation of ultra-large container vessels.
'The IMF projection - if it turns out to be correct - is telling us that the current low demand levels are likely to persist for a while,' he said.
Consequently, the high levels of capacity withdrawals are also likely to persist. This is a view that is also backed up by the actual capacity withdrawals thus far seen in Q3.