More than half the world’s countries have approached the International Monetary Fund for a bailout to weather the financial crisis caused by the coronavirus pandemic.
The IMF’s Managing Director Kristalina Georgieva told a meeting of G20 finance ministers and central bank governors that more than 100 countries have so far asked for emergency assistance.
With many countries in full lockdown and their economies effectively in stasis, the IMF warned this week the coronavirus pandemic is plunging the global economy into its deepest slump since the Great Depression of the 1930s.
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On Tuesday, the Washington-based body said it expects global GDP will contract by 3% in 2020, “a far worse recession than the one that followed the global financial crisis of 2008” says CNN, with a risk it could extend into 2021 if policymakers fail to coordinate a global response.
The Telegraph estimates world leaders have already committed almost $8 trillion (£6.4 trillion) to battle the coronavirus and its economic fallout, “driving public debt up to dangerously high levels”.
More than $7.8 trillion has so far gone towards health, tax and spending measures, public sector loans and equity investments, plus other loan guarantees and liabilities.
“At the same time tax revenues will slump as the economy grinds to a halt,” says the paper.
Speaking to CNBC, Georgieva she was ready to use the IMF’s “full toolbox and $1 trillion firepower” of lending capacity, noting that 10 countries have so far received emergency funding, and half of the remaining countries should receive their requested financial lifelines by the end of April.
“This is an emergency like no other. It is not because of bad governors or mistakes,” she said, “and for that reason, we are providing funding very quickly.”
CNN’s Sherisse Pham writes that while the IMF chief “acknowledged that the fund has a reputation for imposing tough conditions on countries seeking bailouts”, this time she asked for governments to prioritise paying doctors and nurses, making sure health systems are functioning, and vulnerable people and first responders are protected.
While the coronavirus has so far concentrated mainly in G20 nations, in a recent interview with Reuters, the IMF’s chief economist, Gita Gopinath, predicted that the pandemic would be devastating for the economies of poor countries, “many of which have fewer resources to deal with the fallout from the pandemic, not to mention high debt levels and weak health-care infrastructures”, says Forbes.
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