International Monetary Fund (IMF) Managing Director Kristalina Georgieva has warned of a recession worse than the global financial crisis back in 2008.
“We’re now in recession, it is way worse than the global financial crisis,” Georgieva said on Friday at a joint press conference with the World Health Organization (WHO), noting the ‘dual crisis’ – health and economic crisis – caused by COVID-19 outbreak is unprecedented in the history of IMF. Georgieva stressed that saving lives and protecting livelihoods ought to go hand in hand as the coronavirus sweeps across the globe.
According to the WHO, more than 1 million confirmed cases of COVID-19 have been reported, including more than 50,000 deaths.
To accommodate this surge, the IMF is deploying total financial capacity of $1 trillion, Georgieva said, emphasising that “we are determined to use as much as necessary in protecting the economy.”
Noting that nearly $90 billion have flown out of emerging markets, even more than the scale seen during the 2008 global financial crisis, Georgieva said the IMF is mobilising emergency financing assistance to emerging markets and developing economies, which are hit hard by the pandemic. Over 90 countries have placed a request to IMF for emergency financing, calling on these countries to prioritise the use of financing to pay health workers, make sure health facilities functioning well, as well as support vulnerable people and firms.
She warned a wave of bankruptcies and layoffs would make the recovery even more difficult.