IMF Warns Coronavirus Recession Could be Worse Than 2009 Financial Crisis

IMF projects negative global growth for 2020, recovery in 2021

Coronavirus recession could be worse than 2009: IMF

IMF Handling Director Kristalina Georgieva welcomed fantastic financial actions now taken by numerous countries to boost health systems and safe affected employees and business, and actions taken by reserve banks to eliminate financial policy. She also praised countries that have addressed the crisis with fiscal spending but said more will be needed.

It is "the largest outflow of capital (from the block) since there are no records", says its managing director, Kristalina Georgieva, in a note published this Monday after the conference call between the G20 leaders.

" The human costs of the coronavirus pandemic are now countless, and all nations need to interact to secure individuals and restrict the economic damage", Georgieva mentioned.

Earlier this month, Georgieva had warned that 2020 world growth would be below last year's 2.9 percent rate, but stopped short of predicting a recession. But we expect a recovery in 2021 and, to reach it, it is essential to prioritize containment (of the virus) and strengthen health systems.

According to the managing director, the impact of the virus on the global economy will be severe but the quicker the world find a solution to it, the better and faster the economic recovery.

The International Monetary Fund (IMF) sheds light on one of the biggest financial drains since the coronavirus crisis began: the flight of capital from emerging countries.

Georgieva said that emerging markets and low-income countries "face significant challenge" and may need more financial support and even debt relief. "We are exploring this option with our membership".

According to her, as the global liquidity crunch takes hold, the institution needs members to provide additional swap lines, adding that "we will be exploring with our executive board and membership a possible proposal that would help facilitate a broader network of swap lines, including through an International Monetary Fund swap-type facility".

Comments will be moderated. The fund said it's also exploring a possible proposal that would help facilitate a broader network of swap lines, including through an IMF-swap type facility.

As the novel coronavirus continues to spread across the world, most economic activities are being halted, increasingly raising the prospects of a global economic recession in 2020, analysts have predicted. The IMF is working closely with the World Bank to provide loans to them. Bank of America expects the USA economy to shrink by a record 12 percent in the second three months of the year.

The IMF said a dozen Middle Eastern and North African countries had already approached it for financial support. To be able to enhance subsequent yr, it's obligatory to regulate the an infection of "covid-19" as quickly as attainable. kristalina georgieva mentioned that to date round 80 global locations have requested for assist from the IMF.

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