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Coronavirus impact: ‘It’s clear we have entered recession,’ says IMF chief

WASHINGTON: The coronavirus 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 in 2009 following the global financial crisis, she said in an online press briefing.

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

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    But she warned that “we believe this is on the lower end.”

    Over 80 countries already have requested emergency aid from the International Monetary Fund.

     “We do know that their own reserves and domestic resources will not be sufficient, and it is in this context that our members are asking us to do more, do it better and do it faster than ever before,” she said.

    Group of 20 leaders on Thursday pledged in a joint statement after a teleconference summit to inject more than $5 trillion into the global economy and do “whatever it takes” to overcome the pandemic.

    Read more: IMF Seeks G-20 Backing to Boost Reserves to Aid Crisis Fight

    Georgieva’s comments followed a conference call meeting of the International Monetary and Financial Committee, the main advisory panel of the IMF’s 189 member countries. The IMF is going beyond its traditional lending facilities and will explore additional options to help members that experience foreign exchange shortages, Georgieva said in a statement following the meeting.

    World Bank President David Malpass said in a separate statement that he and Georgieva are working to flesh out an approach to debt relief for the world’s poorest countries that request forbearance. They plan to present the strategy in time for the Spring Meetings of the institutions, which will convene in a virtual format in mid-April, Malpass said.

    “Beyond the health impact from the pandemic, we expect a major global recession,” Malpass said. “Poorer countries will take the hardest hit, especially ones that were already heavily indebted before the crisis.”