New Delhi (NVI): Coronavirus has forced the global economy into recession which might be worse than the one witnessed in 2009, the International Monetary Fund (IMF) said today.
As per IMF’s current estimation, the finance needs of emerging markets is $2.5 trillion, a lower-end estimate for which their own reserves and domestic resources would not be sufficient.
”We have reassessed the prospect for growth for 2020 and 2021. It is now clear that we have entered a recession as bad as or (even) worse than in 2009,” the IMF’s Managing Director Kristalina Georgieva said at a press briefing following a conference call of the International Monetary and Financial Committee (IMFC).
”We project a rebound in 2021, but only if we contain the virus and prevent liquidity problems from becoming a solvency issue,” she said.
Many of the emerging markets will experience a contraction as necessary containment measures take their toll, and are shocked by reduced global demand for their exports – tourism, commodities, and manufactured goods that provide critical streams of foreign exchange, she said.
The IMF has launched policy actions tracker for 186 countries to see who is doing what, Georgieva said.
”We will be updating this information regularly and will provide country-specific analysis in line with our surveillance mandate,” she added.
She also said that G20 yesterday reported fiscal measures totalling some 5 trillion dollars or over 6 % of global GDP.
A key concern about a long-lasting impact of the sudden stop of the world economy is the risk of a wave of bankruptcies and layoffs that not only can undermine the recovery but can erode the fabric of our societies, she said.
She further suggested, ”To avoid this happening, many countries have taken far-reaching measures to address the health crisis and to cushion its impact on the economy – both on the monetary and on the fiscal side.”
