The International Monetary Fund (IMF) has said that a minimum of 170 countries will experience a slide in their revenue this year as a result of the COVID-19 pandemic.
This was contained in a statement issued on Monday by the Bretton Wood institution’s managing director, Kristalina Georgieva.
The IMF boss, in the statement, which was issued as part of the ongoing virtual IMF/World Bank Springs meeting, said, “This year 170 countries will see income per capita go down—only months ago we were projecting 160 economies to register positive per capita income growth.”
According to her, “I have been saying for a while that this is a “crisis like no other.” It is more complex, with interlinked shocks to our health and our economies that have brought our way of life to an almost complete stop; more uncertain, as we are learning only gradually how to treat the novel virus, make containment most effective, and restart our economies; and truly global. Pandemics don’t respect borders, neither does the economic shocks they cause.”
Georgieva said her organisation had risen to the challenge of rescuing the world from the effects of the pandemic by reaching out to help countries whose economies had been impaired by the pandemic.
According to her, “Exceptional times call for exceptional action. In many ways, there has been a ‘response like no other’ from the IMF’s membership.”
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Stating what IMF had done to help its member countries, she said the organisation had sought to maximise its capacity to provide financial resources quickly, especially for low-income members.
She added that the IMF had doubled its emergency, rapid-disbursing capacity to meet expected demand of about $100 billion.
“One hundred and three countries have approached us for emergency financing, and our Executive Board will have considered about half of these requests by the end of the month,” she said.
The IMF boss noted that despite what had been done more still had to be done to prevent a protracted recession.
According to her, “We need to think hard about where this crisis is headed and how we can be ready to help our member countries, being mindful of both risks and opportunities. Just as we responded strongly in the initial phase of the crisis to avoid lasting scars for the global economy, we will be relentless in our efforts to avoid a painful, protracted recession.”
She expressed concern about emerging markets and developing countries which had already experienced the sharpest portfolio flow reversal of about $100 billion.
She said: “To help lay the foundations for a strong recovery, our policy advice will need to adapt to evolving realities. We need to have a better understanding of the specific challenges, risks, and tradeoffs facing every country as they gradually restart their economies.
“Key questions include how long to maintain the extraordinary stimulus and unconventional policy measures, and how to unwind them; dealing with high unemployment and “lower-for-longer” interest rates; preserving financial stability; and, where needed, facilitating sectoral adjustment and private sector debt workouts.
“We also must not forget about long-standing challenges that require a collective response, such as reigniting trade as an engine for growth; sharing the benefits of fintech and digital transformation which have demonstrated their usefulness during this crisis; and combating climate change—where the stimulus to reinforce the recovery could also be guided to advance green and climate-resilient economy.”