IMF: COVID-19 crisis will cost economy $9 trillion over two years
Coronavirus has created the worst crisis in the history of the IMF
IMF chief calls COVID-19 crisis unprecedented
IMF and WHO experts believe recovery will be long
The market lays down a protracted decline in prices
Director of the International Monetary Fund (IMF) Kristalina Georgieva called the current economic crisis the worst in the history of the organization. She also added that the recovery process will be long.
The head of the IMF announced her disappointing findings at a press conference at the World Health Organization (WHO) in Geneva. [CNBC]
Georgieva told reporters that COVID-19 has led to a financial collapse that is unparalleled. She estimates that this is much worse than the economic crisis of 2008, the year when the world economy froze..
The weak will suffer harder
She also made it clear that the shutdown of industry and entire sectors of industry will hit developing countries the hardest, while strong economies will more easily survive the dire consequences of the crisis..
Just as COVID-19 is most dangerous for sick and weak people, so the economic crisis hits first of all on those who are weaker.
This is primarily due to the lack of financial resources.
Most developing countries have little reserves to support their economies in times of crisis.
In addition, developing countries are also more dependent on exports, which makes their situation worse. The crisis provoked a flight of investors and an outflow of capital from the developing segment – already in the amount of over $ 90 billion.
“This is much more than during the global financial crisis, in addition, some countries are highly dependent on the export of raw materials. Prices fall and they are hit again. “.
By the time of the press conference, 90 countries had already approached the fund for help.
With $ 1 trillion in reserves, the agency pledged to use all of its resources to support countries with weakened economies.
Long way up
Hope for economic recovery, especially in developing countries, remains elusive. Removing stay-at-home restrictions or allowing companies to resume normal operations will increase economic risks.
Those countries that rush to lift the restrictions will face even more serious economic consequences, according to WHO Director-General Tedros Adanom Ghebreisuas. [CNBC] This is due to new waves of deadly epidemic.
IMF agrees now to keep economic activity to a minimum.
According to Georgieva, the recovery will be long, while the countries must take tough measures now for the sake of stability in the future..
The markets are also in crisis
The global economy is at a standstill, with most investors expecting a fall in most sectors. Over the past week, Bitcoin has stabilized in the region of $ 6,500- $ 6,700 and, apparently, for cryptocurrency investors, the worst is over. However, a massive economic recovery will be required to return to the highs of the beginning of the year. And, as noted in the IMF, the way up will be long.
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