U.S. economy faces significant risks, long road to recovery - IMF staff

WASHINGTON, July 17 (Reuters) - U.S. economic output is expect to contract by 6.6% in 2020 due to the shock of the coronavirus pandemic, but a resurgence in coronavirus infections and a systemic increase in poverty could worsen that outlook, the staff of the International Monetary Fund warned on Friday.

After concluding a regular Article IV review of the world’s largest economy, IMF staff cited other risks, including a big increase in government and corporate debt levels, and the prospect of a long period of low, or even negative, inflation.

“There are tremendous uncertainties surrounding the economic propagation of the COVID-19 shock,” the note said. “It will likely take a prolonged period to repair the economy and to return activity to pre-pandemic levels.”

Reporting by Andrea Shalal Editing by Chizu Nomiyama