The global economy has plunged into a recession, at least no less than in 2009, said Kristalina Georgieva, managing Director of the International Monetary Fund (IMF).
“The downturn for 2020 is expected to be quite deep,” the IMF chief said at a briefing, warning that recovery in 2021 can only begin if the spread of COVID-19 coronavirus infection is contained.
Georgieva sees a particular threat in the possibility of a wave of bankruptcies and job cuts, which can not only undermine the ability of the economy to recover, but also destroy the very foundation of society.
In this regard, the head of the IMF called on all countries to “aggressively” counter the spread of the disease and support the economy to shorten the duration of the global recession and prevent too deep a fall.
According to Georgieva, the IMF has already recorded an unprecedented surge in requests for emergency funding, such requests have already been submitted by about 80 countries, although until now the IMF has never considered more than a few requests at the same time.
“We see a wide range of problems arising in emerging markets: the spread of the virus, the shutdown of the economy, the outflow of capital and — for commodity exporters — a price shock,” Georgieva said. According to her, many of the emerging market countries faced problems due to the reduction of currency receipts, which provided an influx of tourists, as well as the export of some goods. The head of the IMF estimated the total demand of emerging markets for financing at $ 2.5 trillion. These countries will not be able to provide it with their resources, Georgieva warned.
On Friday, March 27, Georgieva and the Chairman of the International monetary and financial Commitments, Lesetja Kganyago, also published a joint statement.
“We are in an unprecedented situation where a global health pandemic has turned into an economic and financial crisis. In the context of a sudden cessation of economic activity, global output will decline in 2020,” the document noted.
The statement also indicated that the IMF is ready to use its financial potential of $ 1 trillion to support member states.