The managing Director of the IMF Kristalina Georgieva said that the economic consequences of the crisis caused by COVID-19 will have a sharply negative trend at least until next year, that will be the worst shock to the world since the great depression.
She said this in a special address of the headquarters of the IMF “confronting the crisis: priorities for the global economy.”
“We still face enormous uncertainty about the extent and duration of the crisis. However, it is now clear that global growth will change dramatically in a negative direction in 2020”, – said the head of the Fund.
She added that “in fact, the IMF predict the worst shock since the great depression”.
As noted by the managing Director of the IMF three months ago in 2020, the expected positive growth of income per capita in more than 160 countries that are members of the Fund. “Today, the figure turned on its head: now we forecasted for this year, more than 170 countries have negative growth of income per capita,” said Georgieva.
Thus, according to her, the crisis will most severely affect the economies of developing countries and countries with low income levels.
At the same time, according to the head of the Fund, if the pandemic goes out in the second half of 2020, the IMF forecasts a partial recovery in economic growth in 2021. “But again, I emphasize, there is great uncertainty about the prediction: it can get worse depending on many factors, including the duration of the pandemic,” said Georgieva.
Meanwhile, head of the Foundation called “encouraging news” that all governments began to act and mostly coordinated. “In our Budget newsletter, which will be released next week, will be a question that countries around the world have adopted fiscal measures worth about $8 trillion. In addition, we have implemented large-scale monetary measures by the G20 and others,” she said.
In this regard, the managing Director of the IMF have identified four priorities that should become a “bridge to recovery” in the global economy. Among them – the appropriate support to national health systems; protection of businesses and individuals fiscal simplifications, and social assistance. In addition, priority should be steps to reduce the stress in national financial systems, and planning phase of the economic recovery to minimize the effects of the crisis.
Georgieva also said that the IMF has $1 trillion of credit funds, which has now claimed 90 member countries of the Fund. In addition, the IMF Executive Board agreed to the extension of access to emergency funds, “which will allow us to satisfy the expected need to Finance about $100 billion.” According to her, there are other instruments, including deferred debt for low-income countries.
“We still don’t know how to change our economy and way of life, but we know that we will emerge from this crisis a more flexible,” concluded the managing Director of the IMF.