Nearly 80 countries have requested the help of the IMF, which now stands ready to dispense all of its US$1 trillion in lending capacity.
“These are extraordinary circumstances,” said IMF managing director Kristalina Georgieva.
“Many countries are already taking unprecedented measures. We at the IMF, working with all our member countries, will do the same. Let us stand together through this emergency to support all people across the world.”
Ms Georgieva said that the outlook for 2020 is negative, forecasting “a recession at least as bad as during the global financial crisis or worse”.
“We expect recovery in 2021,” Ms Georgieva said.
“To get there, it is paramount to prioritise containment and strengthen health systems – everywhere. The economic impact is and will be severe, but the faster the virus stops, the quicker and stronger the recovery will be.”
Of primary importance to the IMF are emerging markets, from which investors have already removed US$83 billion since the beginning of the crisis in the largest capital outflow ever recorded, and Ms Georgieva signaled that the IMF was working closely with the World Bank to ease burgeoning debt distress.
“Advanced economies are generally in a better position to respond to the crisis, but many emerging markets and low-income countries face significant challenges,” Ms Georgieva said.
“They are badly affected by outward capital flows, and domestic activity will be severely impacted as countries respond to the epidemic.”
The IMF is concentrating “bilateral and multilateral surveillance” on the crisis, and welcomed the measures that countries had already taken to temper its impact while calling for more action.
“We strongly support the extraordinary fiscal actions many countries have already taken to boost health systems and protect affected workers and firms,” Ms Georgieva said.
“We welcome the moves of major central banks to ease monetary policy. These bold efforts are not only in the interest of each country, but of the global economy as a whole. Even more will be needed, especially on the fiscal front.”
