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World Economy facing severe damage

Syed Umarullah HussainiWeb Editor

24th Mar, 2020. 09:56 am
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World Economy

The Chief of International Monetary Fund (Chief IMF) has warned the world economy is facing severe damage due to global pandemic that could be more costly than 2009 financial crisis.

As per details,  , IMF chief Kristalina Georgieva said world economy facing “severe” economic damage from the coronavirus pandemic that could even more costly than in 2009

She said this will require an unprecedented response.

Georgieva called on advanced economies to provide more support to low income countries, which face a massive outflow of capital, and said the IMF stands “ready to deploy all our $1 trillion lending capacity.”

As much of the world faces mass shutdowns, Georgieva warned finance ministers from the Group of 20 nations that the outlook for 2020 “is negative — a recession at least as bad as during the global financial crisis or worse.”

The global economy contracted by 0.6 percent in 2009 as a result of the 2008 global financial crisis, but major emerging markets like China and India at the time were growing at a rapid rate.

In contrast, the coronavirus pandemic is causing worldwide economic and human carnage, and some forecasters now say the downturn could be 1.5 percent.

“The human costs of the coronavirus pandemic are already immeasurable and all countries need to work together to protect people and limit the economic damage,” Georgieva said.

However, emerging markets and low-income countries “face significant challenge” and may need additional financial support and even debt relief.

“Investors have already removed $83 billion from emerging markets since the beginning of the crisis, the largest capital outflow ever recorded,” she said.

Nearly 80 countries have already requested emergency aid from the IMF to deal with the virus outbreak, Georgieva said.

IMF Approached

On the other hand The International Monetary Fund said it approached by a dozen countries in the Middle East and Central Asia who have asked for financial support in dealing with the coronavirus impact on their economies.

Reuters reported that challenge would be especially daunting for fragile and conflict-torn states such as Iraq, Sudan and Yemen, Director of the Middle East and Central Asia Department, Jihad Azour, wrote in an online IMF blog.

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