The IMF will lower its global growth forecast due to the expansion of the coronavirus

The International Monetary Fund (IMF) already assumes that the economy will grow in 2020 at a rate lower than 2.9% recorded in 2019, after last January anticipated an expansion of 3.3%, once it reaches of the crisis caused by the coronavirus, "a global problem, not regional", has overcome the "baseline scenario" of the institution, which handles "more adverse scenarios" for its new economic forecasts, which will be released in mid-April.

"Our baseline scenario no longer applies. We analyze more adverse scenarios," IMF managing director Kristalina Georgieva acknowledged after the epidemic has not been contained and has spread outside of China. "More than a third of our 189 members are affected," said the Bulgarian during a press conference shared with the president of the World Bank, David Malpass, following the teleconference held by the International Financial and Monetary Committee to address the crisis of the coronavirus

"In the case of China, we have received encouraging reports from the authorities about the restart of production, which is currently around 60% and is expected to reach 90% to 100% in the coming weeks," he said. the director of the IMF, who has pointed out the difficulty of quantifying the level of economic downturn and the duration of the impact of the epidemic, which will depend on the evolution of the virus and the speed and effectiveness of the actions taken.

Georgieva has stressed that the rapid evolution of the disease has made Covid-19 a "global problem, not a regional one", which affects supply and demand, so a global response will be necessary.

In this way, he pointed out the urgency of countries guaranteeing health spending and shielding their financing, something particularly complicated for countries with weak health systems.

Secondly, Georgieva has pointed out the need to adopt macroeconomic measures to address the demand and supply shocks caused by the coronavirus and the containment measures implemented, which should focus on the companies and sectors most affected by the epidemic.

He has also indicated the importance of maintaining adequate liquidity, highlighting interventions by central banks, although he stressed that the financial system is currently "in good shape" and access to credit at the moment has not been a problem. .

In this regard, the president of the World Bank, David Malpass, has pointed out the importance that "fiscal and monetary stimuli do not displace working capital."

The World Bank announced yesterday a package of 12,000 million dollars (10,787 million euros) to help countries in difficulty to fight against the coronavirus.


Source link