The International Monetary Fund expects the worst “economic fallout” since the Great Depression due to the novel pandemic, said the fund’s manager directing.
“It is already clear, however, that global growth will turn sharply negative in 2020, as you will see in our World Economic Outlook next week,” Kristalina Georgieva stressed late Thursday.
She said the pandemic had smashed social and economic order at lightning speed by causing the tragic loss of life and a global lockdown.
The annual spring meetings of the IMF and World Bank Group next week with its 189 members will focus on this issue, she highlighted.
While global growth expectations were positive just three months ago, they has since turned to a negative scenario, she added.
The IMF’s International Institute of Finance also revised its global GDP expectation for the first time to minus 2.8%. Its forecast just last October was 2.6%.
Georgieva underlined that the virus hit every country but emerging markets and poor countries face especially high risk.
“With weaker health systems to begin with, many face the dreadful challenge of fighting the virus in densely populated cities and poverty-stricken slums, where social distancing is hardly an option,” she expressed.
She added: “We estimate the gross external financing needs for emerging market and developing countries to be in the trillions of dollars, and they can cover only a portion of that on their own, leaving residual gaps in the hundreds of billions of dollars.”
She said: “They urgently need help.”
Georgieva also said that in the face of the pandemic, countries worldwide have so far taken measures totaling around $8 trillion.
If the global outbreak issue is resolved in the second half of 2020, the global economy may see a gradual recovery in 2020 and 2021, she said.
After originating in Wuhan, China last December, COVID-19, the disease caused by the coronavirus, has spread to at least 184 countries and regions across the world.
The pandemic has killed nearly 96,000 people and infected over 1.6 million, while more than 355,000 people have recovered from the disease, according to figures compiled by the U.S.’ Johns Hopkins University.