IMF Warns Coronavirus Recession Could be Worse Than 2009 Financial Crisis

  • IMF Warns Coronavirus Recession Could be Worse Than 2009 Financial Crisis

IMF Warns Coronavirus Recession Could be Worse Than 2009 Financial Crisis

"Since the last meeting of G20 finance ministers and Central Bank governors in February, the global economy outlook has significantly deteriorated and that the evolution and global spread of the COVID-19 pandemic has impacted the global economy at the backdrop of disruption in elements of both supply and demand".

G-20 finance ministers and central bank governors will meet virtually on a regular basis to continue discussion and take urgent actions needed to address the global challenge presented by the Covid-19 pandemic, the statement said. The G20 countries are: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States and the European Union.

Cases of coronavirus have been reported in 195 countries and territories across the world.

Kristalina Georgieva, the IMF's Managing Director said the outlook for global growth for 2020 it is negative. "But we expect a recovery in 2021", she said.

Ms Georgieva said that efforts to control the epidemic should be the first priority of all governments who need to devote their resources to strengthening their health systems.

He highlighted that the G20 should be ready to undertake further emergency response to address this global crisis and set a vision for the medium-and long-term actions that will foster a rapid recovery in the economy and catalyze the potential for stronger economic growth. "Even more will be needed, especially on the fiscal front", she said.

Advanced economies were generally in better shape to deal with the crisis, but many emerging markets and low-income countries face significant challenges, including outward capital flows.

"Investors have already removed Dollars 83 billion from emerging markets since the beginning of the crisis, the largest capital outflow ever recorded".

"This will require a double-digit of GDP support in the developed world and creating the conditions through the International Monetary Fund, through the swaps among central banks, through the creation of new facilities", he said.

Ms Georgieva said the International Monetary Fund was focusing on policy actions to reduce the impact of this crisis and was ready to assist those needing financial support.

Asserting that the IMF is concentrating bilateral and multilateral surveillance on this crisis and policy actions to temper its impact, Georgieva said the IMF will massively step up emergency finance - almost 80 countries are requesting our help - and are working closely with the other worldwide financial institutions to provide a strong coordinated response.

"We are replenishing the Catastrophe Containment and Relief Trust to help the poorest countries". "We are looking at other available options".

The IMF is standing ready to deploy all its United States dollars 1 trillion lending capacity, she said, adding that the IMF is looking at other available options. Bank of America expects the U.S. economy to shrink by a record 12 percent in the second three months of the year.