The world has entered a recession due to the coronavirus pandemic, said the International Monetary Fund (IMF) Managing Director Kristalina Georgieva in Washington, DC on Friday, March 27.
“We have reassessed the prospects for growth for 2020 and 2021. It is now clear that we have entered a recession as bad or worse than in 2009. We do project recovery in 2021,” the IMF Chief told reporters at a news conference after a meeting of governing body of the IMF, the International Monetary and Financial Committee.
.@KGeorgieva: It is now clear that we have entered a recession. We project a rebound in 2021, but only if we contain the virus and prevent liquidity problems from becoming a solvency issue.https://t.co/dg8FHiuftW#COVID19pic.twitter.com/BIbFaRB48u
The IMF Chief said the key to recovery in 2021 is only if the international community succeeds in containing the virus everywhere and prevent liquidity problems from becoming a solvency issue.
“A key concern about a long-lasting impact of the sudden stop of the world economy is the risk of a wave of bankruptcies and layoffs that not only can undermine the recovery but can erode the fabric of our societies,” Georgieva said.
She added that several countries have taken measures to address the health crisis and prevent its impact on the economy, both on the monetary and on the fiscal side.
The IMF has received 81 emergency financing requests, including 50 from lower-income countries. Furthermore, the current estimate for the overall financial needs of emerging markets is 2.5 trillion dollars.
“We believe this is on the lower end. We do know that their own reserves and domestic resources will not be sufficient,” she said. The IMF Chief added that the fund is aiming to beef up its response “to do more, do it better, do it faster than ever before.”