Fri. Apr 3rd, 2020

The IMF warns that the economy could fall to 0.2% due to the coronavirus


The managing director of International Monetary Fund (IMF), Kristalina Georgieva, warned this Sunday in the emirate city of Dubai that the increase of the World economy, estimated at 3.3% by 2020, could be reduced by 0.1% to 0.2% due to the outbreak of coronavirus.

“Our prediction is 3.3%, and here there could be a 0.1 to 0.2% cut,” Georgieva said during an intervention at the Global Women’s Forum 2020 in Dubai. The IMF chief said that if Wuhan’s coronavirus is contained quickly, there could be a sharp decline in the economy followed by a “very rapid recovery,” which is known as a V curve. However, she considered that it is still too early to Know what the exact impact of the outbreak will be.



The IMF managing director, Kristalina Georgieva

The IMF managing director, Kristalina Georgieva
(KARIM SAHIB / AFP)




The new coronavirus epidemic could have a negative effect on global growth in 2020 depending on China’s ability to slow its spread, the IMF director continued, so she asked not to draw “hasty conclusions.” Even so, he acknowledged that the tourism and transport sectors, among others, have already been affected by the epidemic.

On Wednesday, Georgieva said on the US television channel CNBC that the most likely scenario was a sharp decline in activities in China, followed by a rapid recovery and a relatively limited global impact, and stressed that this fThat was the case during the Severe Acute Respiratory Syndrome epidemic (SARS), which killed 299 people between 2002 and 2003.


Impact

China accounts for a fifth of the world economy

If China manages to mitigate the epidemic, there would be a process similar to that of the world economy as a whole, with “a small drop and a very rapid rebound,” he reiterated Sunday, adding that China’s weight has passed 8%. during the current SARS at 19%.



As for China’s growth, it was already slowing naturally, Georgieva said, but emphasized that “the reduction of trade tensions” between Washington and Beijing with the signing in January of a preliminary trade agreement had allowed the IMF to anticipate an improvement of its projection for this 2020.

A man with a mask at the main train station in Beijing

A man with a mask at the main train station in Beijing
(Kevin Frayer / Getty)




The IMF released its latest forecasts for the world economy on January 20 and then had a recovery (3.3%, compared to 2.9% in 2019) thanks in particular to a pause observed in the trade war between United States and China. However, he warned that this recovery was fragile and that uncertainty could thwart the increase.

The Global Forum of Women where the director of the IMF participated is carried out with the presence of many personalities, including the daughter and advisor of the president of the United States, Donald Trump, Ivanka Trump and former British Prime Minister Theresa Ma





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