World faces 'worst economic fallout’ since Great Depression: IMF

IMF Managing Director Kristalina Georgieva

WASHINGTON — As the world reels from the outbreak of the coronavirus pandemic, there are mounting concerns over its fallout on global economy.

One such concern was expressed on Thursday by the International Monetary Fund chief with a warning that the pandemic will turn global economic growth “sharply negative” in 2020, triggering the worst fallout since the 1930s Great Depression and will hit low-income nations in Africa, Latin America and Asia the hardest.

IMF Managing Director Kristalina Georgieva said that 170 of the 189 members will be experiencing a decline in per capita income.

"In fact, we anticipate the worst economic fallout since the Great Depression," Georgieva said in a speech previewing next week's spring meetings of the IMF and World Bank.

The meetings will be held virtually due to the restrictions imposed due to the COVID-19.

With half of the member countries seeking aid, the executive board has agreed to double access to its emergency financing to meet expected demand of about $100 billion, Georgieva said.

Earlier this week, a UN study said 81 percent of the world's workforce of 3.3 billion people had had their place of work fully or partly closed because of the outbreak.

The IMF will release its World Economic Outlook next Tuesday with grim forecasts for its members for this year and next.

The IMF’s baseline outlook is for a partial recovery in the global economy in 2021 if the pandemic fades in the second half of this year to allow a gradual lifting of containment measures, Georgieva said. She stressed that uncertainty about the coronavirus duration means things may wind up being even worse.

Georgieva highlighted the hit to the retail, hospitality, transport and tourism industries and the effect on the self-employed and small- and medium-sized businesses.

Her comments came as the US reported that the number of Americans seeking unemployment benefits had surged for the third week by 6.6 million, bringing the total over that period to more than 16 million Americans.

The US Federal Reserve said it would unleash an additional $2.3 trillion in lending as restrictions on activity to help contain the coronavirus had forced many businesses to close and put about 95 percent of Americans on some form of lockdown. — Agencies