The International Monetary Fund (IMF) has announced that the global economy has gone in ‘recession’. IMF chief Kristalina Georgieva said coronavirus pandemic has driven the global economy into a downturn. The developing nations would require massive funding to bounce back said Georgieva.
“It is clear that we have entered a recession” that will be worse than in 2009 following the global financial crisis”, said the IMF chief. The ‘sudden stop’ of the worldwide economy would require pumping in $2.5 trillion for the emerging market, she added.
She also presented a positive side to it. The IMF chief said that the estimate of recession “is on the lower end.” Recovery is projected in 2021. However, it is possible only if:
- Coronavirus can be contained
- Preventing liquidity problems from becoming solvency issues
“Over 80 countries, mostly of low incomes, have already have requested emergency aid from the International Monetary Fund“. informed the chief. The capital exodus of more than $83 billion in recent weeks is witnessed by governments in the emerging market countries as per IMF. For many of these countries ‘domestic resources’ are not enough, especially with high debts already on them. The IMF is aiming to beef up its response to help these countries.
The IMF chief requested an increase in the fund’s fast-deploying emergency facilities from their current level of around $50 billion. She also praised the USA’s $2.2 trillion economic package .