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The IMF expects a global recession in 2020 due to the pandemic, today, Monday, March 23, 2020 11:31 pm
Kristalina Georgieva, IMF Director, welcomed the extraordinary financial steps taken so far from many countries to strengthen health systems and protect affected companies and workers, and what central banks have taken to facilitate monetary policy. But she said, “More is needed, especially at the financial level.”
Georgieva released the new forecasts after a conference call to finance ministers and central bankers from the Group of 20 nations, who said they had agreed on the importance of world solidarity.
“The human cost of the Corona Virus pandemic is truly immeasurable and all countries should work together to protect people and reduce economic damage,” she added.
More countries are imposing closures to contain the rapidly spreading virus, which has infected 337,500 people worldwide and has killed more than 14,600 people.
Georgieva said the outlook for global growth is negative and that the fund now expects “a recession no less than the worst or worst of the global financial crisis.”
Earlier this month, Georgieva warned that global growth in 2020 would be below the 2019 average of 2.9 percent, but she did not expect a recession. Trade wars pushed global growth last year to its lowest level since the contraction of 0.7 percent in 2009.
Georgieva said a recovery is expected in 2021, but to achieve it requires countries to prioritize containment and health systems strengthening.
“The economic impact will be severe, but the sooner the virus stops, the faster and stronger the recovery,” she said.
She added that the fund will increase the emergency funds significantly, noting that 80 countries have already requested assistance and that the fund is ready to use its full lending capacity of one trillion dollars.