The current phase facing all countries is "the long ascent" – a difficult climb that will be "long, uneven, and uncertain though the global economy is gradually recovering," said Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva on Tuesday.

"Global economic activity took an unprecedented fall in the second quarter of this year, when about 85 percent of the world economy was in lockdown for several weeks," Georgieva said at a virtual event held by the London School of Economics ahead of the annual meetings of the IMF and the World Bank Group.

In June, the IMF revised down its forecast for the global economy amid mounting COVID-19 fallout, projecting the global growth to contract 4.9 percent in 2020, 1.9 percentage points below its April forecast.

In 2021, global growth is projected at 5.4 percent.

'Less dire'

Georgieva said the global economy is in "less dire" shape than it was in June "We now estimate that developments in the second and third quarters were somewhat better than expected, allowing for a small upward revision to our global forecast for 2020," she said. The updated forecast will be released next week.

The better-than-expected recovery is largely due to "extraordinary policy measures," which has put a floor under the world economy, Georgieva said.

According to IMF estimation, governments across the globe have provided around $12 trillion in fiscal support to households and firms, along with "unprecedented" monetary policy actions.

"The global economy is coming back from the depths of the crisis. But this calamity is far from over," Georgieva said, noting that the path ahead is clouded with "extraordinary uncertainty."

'Gaps remain'

Despite the upward revision of the global forecast, the IMF chief noted that there is a remarkable gap in response capacity between advanced economies and poorer nations, adding that emerging markets and low-income and fragile states "continue to face a precarious situation."

Emerging markets and low-income countries face a precarious situation with weak health systems, high external debt, and dependency on sectors most exposed to the pandemic, such as tourism and commodities, she said.

"In low-income countries, the shocks are so profound that we face the risk of a 'lost generation,'" Georgieva said, signaling that the IMF and World Bank will press hard for more debt relief for low-income countries next week.

She called for more debt help quickly for low-income countries beyond a moratorium on official bilateral debt payment until the end of 2020. She said development gains could be reversed without access to more grants, concessional credit, and debt relief.

(With input from agencies)