We have entered a recession that will be worse than 2009: IMF chief Kristalina Georgieva

The Coronavirus (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 on Friday, March 27, 2020.

In an online press briefing, the IMF Chief said, "We have reassessed the growth prospects for 2020 and 2021 and it is clear that we have entered a recession" that will be as bad or worse than the one that we witnessed in 2009, following the global financial crisis. Georgieva said, "We project a rebound in 2021 – in fact, there may be a sizeable rebound, but only if we succeed with containing the virus everywhere and prevent liquidity problems from becoming a solvency issue."

She added 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 can erode the fabric of our societies. To avoid this from happening many countries have taken far-reaching measures to address the health crisis and to cushion its impact on the economy both on the monetary and on the fiscal side.

The G20 reported fiscal measures totalling some $5 trillion or over 6% of the global GDP. So, it is very important for those ahead in taking action to share their experience with those still behind. To support this, the IMF has launched a policy actions tracker for 186 countries to help us all see who is doing what. We will be updating this information regularly and will provide country-specific analysis in line with our surveillance mandate.

She added, over 80 countries mostly of low incomes have already requested emergency aid from the International Monetary Fund.