‘Go big’ with corona rescue spending
30 March 2020 | Economics
We are in an unprecedented situation where a global health pandemic has turned into an economic and financial crisis. - IMF
IMF managing director Kristalina Georgieva said she was particularly concerned about emerging markets and developing countries who had seen US$83 billion in capital outflows, adding that they need upwards of US$2.5 trillion in financial resources to recover from virus-related disruptions.
IMF member countries had encouraged the fund to focus its efforts on steps that could be done quickly, including a doubling of emergency financing to US$100 billion and creation of a new short-term liquidity facility, she said in an interview.
The coronavirus pandemic will cause global economic output to contract in 2020, top officials of the IMF said on Friday, adding that an "exceptionally high number of countries" need IMF emergency financing.
Georgieva and International Monetary and Financial Committee chair Lesetja Kganyago said in a statement that to ease foreign exchange shortages for many developing countries, the IMF is exploring additional options that go beyond the fund's traditional lending facilities.
"We are in an unprecedented situation where a global health pandemic has turned into an economic and financial crisis. With a sudden stop in economic activity, global output will contract in 2020," they said in a joint statement following a conference call with the IMFC, the fund's steering committee. – Nampa/Reuters