IMF says health crisis must be ended to halt divergent economic developments

FILE PHOTO: International Monetary Fund logo is seen outside the headquarters building during the IMF/World Bank spring meeting in Washington, U.S., April 20, 2018. REUTERS/Yuri Gripas

WASHINGTON (Reuters) - The International Monetary Fund on Tuesday said a resurgence of COVID-19 cases and fresh lockdowns, or deteriorating prospects for a vaccine, would have a severe impact on global economic activity and trigger financial market turmoil.

IMF chief economist Gita Gopinath told reporters that growing restrictions on trade and investment and rising geopolitical uncertainty also posed risks to the IMF’s slightly improved economic forecast for 2021.

“This pandemic is not over, which means that ... there could be even worse outcomes,” she said.

Reporting by Andrea Shalal; Editing by Chizu Nomiyama