- A correction is defined as a 10% or more decline in the price of an asset or index.
- The IMF estimated earlier this week that the global economy would contract by 4.9% this year, before growing at a pace of 5.4% in 2021. Both estimates were downgraded from April’s forecast.
The International Monetary Fund has warned that the ongoing disconnect between financial markets and the real economy could lead to a correction in asset prices.
In recent months, equity markets have rallied despite troubling real-world events. The world is grappling with the coronavirus health emergency that has taken the lives of almost 500,000 people, according to John Hopkins University data, and threatens to cause an unprecedented economic crisis. In addition, there is social unrest in many advanced economies as citizens demand a more equal society, which could hit investor confidence.
Silvia Amaro | CNBC