The UK must borrow more than 400 billion pounds over two years. The coronavirus response has led to a recession, taking a toll on public finances, according to new data from the International Monetary Fund (IMF).
As the IMF cut its global growth projections for 2020, and the global economy is expected to suffer a loss of $12 trillion this year, economies like the UK could see a drop of 8 percent in collective GDP. Britain will suffer a 10.2 percent drop in GDP in 2020, marking the fifth-worst downturn among G7 economies. France and Italy are forecast to see drops of more than 12 percent.
The deficit will increase to 12.7 percent of GDP this year, representing £280bn in borrowing, which is more than 10 per cent increase on 2019. National debt dropped 85.4% of GDP last year, and is projected to rise to over 100 percent of GDP, which has not happened since 1960, and is projected to remain there until 2021.
This leaves the UK’s debt slightly higher than the global average, but 20 percent lower than the average for advanced economies. The US will see the highest increase in debt at more than 30 percent.
The IMF has advised countries to ensure their healthcare systems have the resources to those with limited healthcare capacity. The IMF urged “strong multilateral cooperation.”