Business

World is now in recession: IMF

International Monetary Fund (IMF) Managing Director Kristalina Georgieva.

International Monetary Fund (IMF) Managing Director Kristalina Georgieva.   | Photo Credit: AP

Virus-hit developing nations need dollops of funding

The COVID-19 pandemic has driven the global economy into a downturn that will require massive funding to help developing nations, IMF chief Kristalina Georgieva said Friday.

“It is clear that we have entered a recession” that will be worse than the one in 2009, following the global financial crisis, she said.

Also read: How can India contain the economic impact of COVID-19?

With the worldwide economic “sudden stop,” Ms. Georgieva said the fund’s estimate “for the overall financial needs of emerging markets is $2.5 trillion.”

But she warned the estimate “is on the lower end.”

Governments in emerging markets, which have suffered an exodus of capital of more than $83 billion in recent weeks, can cover much of that, but “clearly the domestic resources are insufficient” and many already have high debt loads.

Watch | Impact of COVID-19 on the global economy
 

Over 80 countries, mostly with low incomes, have already requested emergency aid from the International Monetary Fund, she said.

“We do know that their own reserves and domestic resources will not be sufficient,” she said, adding the fund is aiming to beef up its response “to do more, do it better, do it faster than ever before.” She also welcomed the $2.2 trillion economic package approved by the U.S. Senate, saying “it is absolutely necessary to cushion the world’s largest economy against an abrupt drop in economic activities.”

A letter from the Editor


Dear reader,

We have been keeping you up-to-date with information on the developments in India and the world that have a bearing on our health and wellbeing, our lives and livelihoods, during these difficult times. To enable wide dissemination of news that is in public interest, we have increased the number of articles that can be read free, and extended free trial periods. However, we have a request for those who can afford to subscribe: please do. As we fight disinformation and misinformation, and keep apace with the happenings, we need to commit greater resources to news gathering operations. We promise to deliver quality journalism that stays away from vested interest and political propaganda.

Support Quality Journalism
Related Topics
Recommended for you
This article is closed for comments.
Please Email the Editor

Printable version | Jun 4, 2020 8:40:56 AM | https://www.thehindu.com/business/world-is-now-in-recession-imf/article31187068.ece

Next Story