AGENCIES, Washington: Top economists and experts are beginning to predictthe after-effects of the coronavirus pandemic on world economies. International Monetary Fund (IMF) chief Kristalina Georgieva said on Thursday that the world is facing an economic crisis unlike any in the past century and will require a massive response to ensure recovery.
Georgieva warned that “global growth will turn sharply negative in 2020,” with 170 of the International Monetary Fund’s 180 members experiencing a decline in per capita income.
“In fact, we anticipate the worst economic fallout since the Great Depression,” Georgieva said in a speech previewing next week’s spring meetings of the IMF and World Bank that will be held through video-conferencing.
Even in the best case the IMF expects only a “partial recovery” next year, assuming the virus fades later this year, allowing normal business to resume as the lockdowns imposed to contain its spread are lifted. But “it could get worse,” and “there is tremendous uncertainty around the outlook” and the duration of the pandemic.
Countries already have taken steps worth a combined $8 trillion, but Georgieva urged governments to provide more “lifelines” for businesses and households to “avoid a scarring of the economy that would make the recovery so much more difficult.”
IMF will release its World Economic Outlook next week with grim forecasts for its members for 2020 and 2021.
In January, the IMF projected global growth of 3.3 per cent this year and 3.4 per cent in 2021. But that was a different world with coronavirus pandemic.
“The bleak outlook applies to advanced and developing economies alike. This crisis knows no boundaries. Everybody hurts,” Georgieva said.
She noted that about $100 billion in investments already had fled emerging markets — more than three times the capital exodus seen in the 2008 global financial crisis.