The global economy has entered into the recession – IMF Chief

The coronavirus pandemic has taken 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 is worse than in 2009 following the global financial crisis, she said in an online press briefing.

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

But the estimate is on the lower end, she warned. 

Governments who emerging in the markets, those who 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 have already had high debt loads.

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Over 80 countries, most of those with low incomes, have already requested emergency aid from the International Monetary Fund. “We do know that their own reserves and domestic resources will not be sufficient,” Georgieva said, and added that the fund is aiming to beef up its response “to do more, do it better, do it faster than ever before.”

The IMF chief spoke to the reporters by following a virtual meeting with the Washington-based lender’s steering the committees when she officially requested an increase in the fund’s fast-deploying emergency facilities from their current level of around $50 billion.

She had also welcomed the $2.2 trillion economic package approved by the US Senate, saying that it is absolutely necessary to cushion the world’s largest economy against an abrupt drop the economic activities.

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