COVID-19: World Has Entered A Recession As Bad Or Worse Than 2009, Says IMF
The IMF said on Friday that it has reassessed the prospect for growth for 2020 and 2021 and that it is now clear that the world has entered a recession – as bad as or worse than in 2009.
“We do project recovery in 2021–in fact there may be a sizeable rebound, but only if we succeed with containing the virus – everywhere - and prevent liquidity problems from becoming a solvency issue”, said IMF Managing Director Kristalina Georgieva at a press conference.
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 added. 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. The G20 on Thursday reported fiscal measures totalling some 5 trillion dollars or over 6 % of global GDP. “It is important for those ahead in taking action to share their experience with those still behind. To support this, last night the IMF launched a policy actions tracker for 186 countries to help us all to see who is doing what. We will be updating this information regularly and will provide country-specific analysis in line with our surveillance mandate”, Georgieva said. “We have seen an extraordinary spike in requests for IMF emergency financing – some 80 countries have placed requests and more are likely to come. Normally, we never have more than a handful of requests at the same time. Yesterday our Executive Board approved the first of these emergency requests for the Kyrgyz Republic, a record fast disbursement”, she remarked.
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 added. 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. The G20 on Thursday reported fiscal measures totalling some 5 trillion dollars or over 6 % of global GDP. “It is important for those ahead in taking action to share their experience with those still behind. To support this, last night the IMF launched a policy actions tracker for 186 countries to help us all to see who is doing what. We will be updating this information regularly and will provide country-specific analysis in line with our surveillance mandate”, Georgieva said. “We have seen an extraordinary spike in requests for IMF emergency financing – some 80 countries have placed requests and more are likely to come. Normally, we never have more than a handful of requests at the same time. Yesterday our Executive Board approved the first of these emergency requests for the Kyrgyz Republic, a record fast disbursement”, she remarked.
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