The head of the International Monetary Fund, IMF Managing Director Kristalina Georgia said Friday it is clear that the global economy has now entered a recession that could be as bad or worse than the 2009 downturn. Although she indicated 189-nation leading agency was forecasting a recovery in 2021, potentially leading to a “sizable rebound”, she said this would only occur if nations succeed in containing the coronavirus and limiting the economic damage.
At the news conference following a telephone conference with finance with finance officials from the 24 nations that makes up the IMF’s policy-setting panel, she said: “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 erode the fabric of our societies.” She inserts that the IMF was updating its economic outlook now and it would be released in a few weeks, allowing the agency more time to assess the economic impacts of the virus.
Asked if the United States was now in recession, she noted that Federal Reserve Chairman Jerome Powell had said Thursday that America “may well be in a recession.” She said she believed not only the U.S. but many other advanced economies and a number of developing countries had already entered downturns.
Georgieva suggests that lower income countries were being hit hard by the spreading coronavirus, with 81 nations now seeking support from an IMF emergency financing program being used to provide aid. She repeated a pledge that the IMF stood ready to make all $1 trillion of its lending resources available to countries being hit by the virus.
“We have seen an extraordinary spike in requests for IMF emergency financing,” Georgieva said. “We are being asked by our members to do more, do it better and do it faster than ever before.”
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