Coronavirus-induced global downturn worse than financial crisis a decade ago: IMF

WION Web Team New Delhi, Delhi, India Apr 04, 2020, 12.05 PM(IST)

International Monetary Fund Photograph:( AFP )

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The IMF's managing director, Kristalina Georgieva, speaking at a joint news conference with the leader of the World Health Organisation (WHO), called on advanced economies to step up their efforts to help emerging markets and developing countries survive the economic and health impact of the pandemic.

The coronavirus pandemic has brought the global economy to a standstill. The International Monetary Fund (IMF) says the recession that has drawn upon the world is "way worse" than the global financial crisis a decade ago.

The IMF's managing director, Kristalina Georgieva, speaking at a joint news conference with the leader of the World Health Organisation (WHO), called on advanced economies to step up their efforts to help emerging markets and developing countries survive the economic and health impact of the pandemic.

"This is a crisis like no other. We have witnessed the world economy coming to a standstill. We are now in recession. It is way worse than the global financial crisis of 2008-2009," she said on a video conference call.

More than 1 million people worldwide have been infected with COVID-19, the disease caused by the virus, and more than 53,000 have died.

Georgieva said the IMF was working with the World Bank and WHO to advance their call for China and other official bilateral creditors to suspend debt collections from the poorest countries for at least a year until the pandemic subsides.

Emerging markets and developing economies have been hard hit by the crisis, Georgieva said, noting that nearly $90 billion in investments had already flowed out of emerging markets, far more than during the financial crisis. Some countries are also suffering from sharp drops in commodity prices.

"Helping emerging markets and developing countries will be a main priority for the IMF in coming weeks and months," she said.

The IMF and WHO have called for emergency aid to be used mainly to strengthen health systems, pay doctors and nurses, and buy protective gear.

The IMF has begun disbursing funds to requesting countries, including Rwanda, with requests from two additional African nations to be reviewed on Friday.

The IMF's board in coming days would review a proposal to create a new short-term liquidity line to help provide funds to countries facing problems. Georgieva also urged central banks and particularly the US Federal Reserve to continue offering swap lines to emerging economies.

(with inputs from agencies)