COVID-19: IMF Offers $50bn To Poor Countries
The International Monetary Fund says it is providing about $50bn through its rapid-disbursing emergency financing facilities for low income and emerging market countries that could potentially seek support.
The Managing Director, IMF, Kristalina Georgieva, said this during the opening remarks at a joint press conference with World Bank Group President David Malpass on the Coronavirus response.
Out of this, she added, $10bn was available at zero interest for the poorest members through the Rapid Credit Facility.
She also said global growth in 2020 would drop below last year’s level.
“How far it will fall, and for how long, is difficult to predict, and would depend on the epidemic, but also on the timeliness and effectiveness of our actions,” she said.
She expressed her deepest sympathies for all the suffering that the outbreak was causing.
While recognising that the situation with the spread of the coronavirus was very serious, she said it could get worse.
She said it was necessary to concentrate on a framework on how to think about the shock, and how the membership, the Fund, and other global institutions could support those affected by this crisis in an effective and coordinated way
Georgieva said, “We know that the disease is spreading quickly. With over one-third of our membership affected directly, this is no longer a regional issue – it is a global problem calling for a global response.
“We also know that it will eventually retreat, but we don’t know how fast this will happen. We know that this shock is somewhat unusual as it affects significant elements of both supply and demand.”
She added that, “Supply will be disrupted due to morbidity and mortality, but also the containment efforts that restrict mobility and higher costs of doing business due to restricted supply chains and a tightening of credit.
“Demand will also fall due to higher uncertainty, increased precautionary behaviour, containment efforts, and rising financial costs that reduce the ability to spend. These effects will spill over across borders.”
Experience suggested that about one-third of the economic losses from the disease will be direct costs: from loss of life, workplace closures, and quarantines, she said.
According to her, the remaining two-thirds will be indirect, reflecting a retrenchment in consumer confidence and business behaviour and a tightening in financial markets.
The good news, she noted was that financial systems were more resilient than before the Global Financial Crisis.
