As a result of the coronavirus outbreak, the global economy has entered a recession equal to or even worse than the 2009 financial crisis, IMF chairman Kristalina Georgieva said in a news conference on Friday.
Travel restrictions and lockdowns have caused global economic activity to plummet, leading to bankruptcies and layoffs. For example, in the United States, nearly 3.3 million people claimed unemployment this week, a record number.
Georgieva warned in particular about the consequences of emerging economies. “The combination of a health crisis with an abrupt brake on the economy will hit these countries especially hard,” said the IMF chief executive.
To drag countries like India and Brazil through the crisis, she says, a huge support package of more than 2 trillion euros is needed. Part of this comes from the IMF itself, the UN organization recently reported to have a borrowing capacity totaling $ 1 trillion (€ 900 billion).
Many national governments have already taken steps to support the economy during this time of crisis. For example, the Dutch government announced measures worth EUR 10 to 20 billion per quarter and the US announced a $ 2 trillion aid package. “But more is needed,” said Georgieva. “Priority should be given to targeted fiscal support to vulnerable households and businesses to accelerate and strengthen the recovery by 2021.”
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