International Monetary Fund (IMF) believes that the Covid-19 epidemic has driven the global economy into a downturn that will require massive funding to help developing nations.
Washington: The Coronavirus pandemic has not just jolted mankind, but its outbreak has caused a severe impact on the global economy with several financial watchdogs predicting massive downturn. Adding more woes to the economic crisis, the International Monetary Fund (IMF) believes that the Covid-19 epidemic has driven the global economy into a downturn that will require massive funding to help developing nations.
“It is clear that we have entered a recession” that will be worse than in 2009 following the global financial crisis,” news agency AFP quoted IMF chief Kristalina Georgieva as saying on Friday during an online briefing.
With the worldwide economic “sudden stop,” Georgieva said the fund’s estimate “for the overall financial needs of emerging markets is 2.5 trillion.”
Georgieva also warned that estimate “is on the lower end.” Governments in emerging markets, which have suffered an exodus of capital of more than 83 billion in recent weeks, can cover much of that, but “clearly the domestic resources are insufficient” and many already have high debt loads, she said.
The IMF chief also highlight the fact that over 80 countries, mostly of low incomes, have already have requested emergency aid from the International Monetary Fund.
“We do know that their own reserves and domestic resources will not be sufficient,” Georgieva said, adding that the fund is aiming to beef up its response “to do more, do it better, do it faster than ever before.”
The IMF chief spoke to reporters following a virtual meeting with the Washington-based lender’s steering committee, when she officially requested a increase in the fund’s fast-deploying emergency facilities from their current level of around 50 billion.
Earlier this week, Georgieva had said that a recovery was expected in 2021, but to reach it, countries would need to prioritise containment and strengthen health systems.
Georgieva said the IMF would massively step up emergency finance, noting that 80 countries have already requested help and that the financial institution stood ready to deploy all of its US$1 trillion in lending capacity.
Washington-based World Bank Group together with the IMF, on Thursday, called on all its official bilateral creditors to suspend debt repayments of poor countries that receive loans from its concessionary window and help them tackle challenges posed by the Coronavirus outbreak.
Source: ABP Live