Although the outlook for 2020 looks bleak, recovery is on the cards for 2021, according to IMF managing director Kristalina Georgieva.
Following a conference call of G20 finance ministers and Central Bank governors Georgieva said that while the human cost of COVID-19 is "already immeasurable" if countries work together they can protect people and limit the economic damage.
"This is a moment for solidarity—which was a major theme of the meeting today," Georgieva said.
"The outlook for global growth for 2020 it is negative—a recession at least as bad as during the global financial crisis or worse. But we expect recovery in 2021."
Georgieva said it is paramount to prioritise containment and strengthen health systems across the globe.
She said that while the economic impact of doing so will be quite severe, the faster the virus is able to be contained the quicker and stronger the recovery will be.
"We strongly support the extraordinary fiscal actions many countries have already taken to boost health systems and protect affected workers and firms," she said.
"We welcome the moves of major central banks to ease monetary policy. These bold efforts are not only in the interest of each country, but of the global economy as a whole. Even more will be needed, especially on the fiscal front."
Georgieva added that advanced economies are in a better position to respond to the crisis, and many emerging markets and low-income countries are facing significant challenges.
"They are badly affected by outward capital flows, and domestic activity will be severely impacted as countries respond to the epidemic," Georgieva said.
"Investors have already removed US$83 billion from emerging markets since the beginning of the crisis, the largest capital outflow ever recorded. We are particularly concerned about low-income countries in debt distress—an issue on which we are working closely with the World Bank."
Georgieva said the IMF is concentrating bilateral and multilateral surveillance on this crisis and policy actions to temper its impact.
"We will massively step up emergency finance—nearly 80 countries are requesting our help—and we are working closely with the other international financial institutions to provide a strong coordinated response," she said.
"We are replenishing the Catastrophe Containment and Relief Trust to help the poorest countries. We welcome the pledges already made and call on others to join."
The IMF said it is standing ready to deploy its entire US$1 trillion lending capacity.
"These are extraordinary circumstances. Many countries are already taking unprecedented measures. We at the IMF, working with all our member countries, will do the same," Georgieva said.
"Let us stand together through this emergency to support all people across the world."
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