Global economy has clearly entered recession: IMF chief
Washington/IBNS: International Monetary Fund chief Kristalina Georgieva on Friday said the growing COVID 19 outbreak across the globe has led the world to enter the state of financial recession.
She warned that the financial recession is far worse than the one which the world had seen in 2009.
.@KGeorgieva: It is now clear that we have entered a recession. We project a rebound in 2021, but only if we contain the virus and prevent liquidity problems from becoming a solvency issue. https://t.co/dg8FHiuftW #COVID19 pic.twitter.com/BIbFaRB48u
— IMF (@IMFNews) March 27, 2020
"It is now clear that we have entered a recession. We project a rebound in 2021, but only if we contain the virus and prevent liquidity problems from becoming a solvency issue," she said in a video briefing.
She said global output will contract in 2020.
“We are in an unprecedented situation where a global health pandemic has turned into an economic and financial crisis. With a sudden stop in economic activity, global output will contract in 2020. Member countries have already taken extraordinary actions to save lives and safeguard economic activity. But more is needed," she said.
"Priority should be afforded to targeted fiscal support to vulnerable households and businesses to accelerate and strengthen the recovery in 2021," she said.
The IMF chief said her organization is ready to use its US$1 trillion financial capacity to support its member countries.
ILO warns:
The economic and labour crisis created by the COVID-19 pandemic could increase global unemployment by almost 25 million, according to a new assessment by the International Labour Organization (ILO).
However, if we see an internationally coordinated policy response, as happened in the global financial crisis of 2008/9, then the impact on global unemployment could be significantly lower.
The preliminary assessment note, COVID-19 and the world of work: Impacts and responses , calls for urgent, large-scale and coordinated measures across three pillars: protecting workers in the workplace, stimulating the economy and employment, and supporting jobs and incomes.
These measures include extending social protection, supporting employment retention (i.e. short-time work, paid leave, other subsidies), and financial and tax relief, including for micro, small and medium-sized enterprises. In addition, the note proposes fiscal and monetary policy measures, and lending and financial support for specific economic sectors.
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