The International Monetary Fund has forecast a contraction of 4.9 percent for the global economy in 2020, citing worse-than-expected economic outputs in the first quarter and a more pessimistic forecast for the second quarter, the Seoul government said Wednesday evening.

The figure is down 1.9 percentage point from the earlier estimate in April. 

In its World Economic Outlook Update, the IMF also expected that the South Korean economy will post a contraction of 2.1 percent this year, down 0.9 percentage point from its earlier outlook in April.

In addition, the IMF predicted Korea will become the only economy among other developed nations to recover to the precoronavirus level of its gross domestic product by the end of 2021. 

Among developed nations, South Korea posted the highest rate of economic growth, slightly above the average figure of developing countries.

The IMF lowered the outlook for developed nations to minus 8 percent, while slashing developing economies’ growth to minus 3 percent, data showed. 

The downturn in global economic forecast came as the majority of economies have seen sharp GDP drops due to the coronavirus pandemic in the first quarter, while economic uncertainties further rose over tensions between the United States and China as well as global oil price volatility, the ministry said. 

By Choi Jae-hee (cjh@heraldcorp.com)