Economy

IMF Warns Coronavirus Recession Could be Worse Than 2009 Financial Crisis

IMF Warns Coronavirus Recession Could be Worse Than 2009 Financial Crisis”

A major theme during the emergency call was the acknowledgment that the world is now facing "a moment of solidarity", according to Georgieva.

Kristalina Georgieva, managing director of the Worldwide Financial Fund (IMF), gave this data in an announcement launched after Monday assembly by way of video conferencing with finance ministers and heads of central banks of G-20 global locations.

Still, according to the organization, the recovery from the looming economic disaster could start as early as 2021. "To get there, it is paramount to prioritize containment and strengthen health systems - everywhere".

She adds that while the economic impact will be severe, the faster the virus stops, the quicker and stronger the recovery will be.

But they also welcome the steps taken by large central banks to expand monetary policy, she added.

In remarks, Saudi Finance Minister Mohammed Al-Jadaan underlined the need to increase G20 efforts to provide support to people and businesses, and protect the stability of the global economy and financial markets.

"Even more will be needed, especially on the fiscal front", she said on Monday.

Indonesia, the world's fourth most populous country and the 15-largest economy in the G20, came into the global campaign rather late as it did not announce any confirmed COVID-19 cases until March 2. Due to the capital withdrawal from these countries, they have been adversely affected and domestic activities will be severely affected.

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In a statement released by her office in Washington, the IMF chief said that since the breakout, 80 countries had sought help from the Fund to cope with its consequences.

"We will massively step up emergency finance - almost 80 countries are requesting our help - and we are working closely with the other global financial institutions to provide a strong coordinated response", she said.

The summit, called by this year's chair, Saudi Arabia, will be complicated by an oil price war between two members, Saudi Arabia and Russian Federation, and rising tensions between two others, the United States and China, over the origin of the virus.

The IMF also stands ready to deploy all of its US$1 trillion lending capacity.

The IMF is exploring other options with its members, Georgieva said.

She reiterated the IMF's concern for low-income countries in debt distress that will be handcuffed compared to advanced economies to respond to their epidemics.

The IMF noted that major central banks that have initiated bilateral swap lines with emerging economies may need to provide more. "These are extraordinary circumstances".

This crisis will likely hit hardest against the poorest and most vulnerable countries, those roughly 25 poorest countries drawing on the World Bank's International Development Association (IDA), he said. We at the International Monetary Fund, working with all our member countries, will do the same.



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