- The International Monetary Fund expects the coronavirus pandemic will cause a recession in 2020 as bad as the global financial crisis, but that the economy will recover in 2021, according to a Monday statement.
- "The economic impact is and will be severe, but the faster the virus stops, the quicker and stronger the recovery will be," said Kristalina Georgieva, managing director of the IMF, in the statement.
- The statement came after an emergency call with Group of 20 finance ministers and central bankers to address the coronavirus crisis.
- Read more on Business Insider.
The coronavirus pandemic will cause a global recession in 2020 that will rival the 2008 financial crisis, the International Monetary Fund said in a Monday statement.
Still, the group foresees a recovery soon after, the IMF's managing director Kristalina Georgieva said.
The IMF's outlook for global growth in 2020 "is negative - a recession at least as bad as during the global financial crisis or worse," Georgieva said in the statement. "But we expect recovery in 2021."
For a swift recovery to be achieved, it is "paramount" that people everywhere prioritize containment and strengthen health systems, she said. "The economic impact is and will be severe, but the faster the virus stops, the quicker and stronger the recovery will be."
The statement was released after a Monday emergency call between the Group of 20 finance ministers and central bankers to address the coronavirus outbreak. Also on Monday, the Federal Reserve announced an array of unprecedented new programs to aid businesses, employers, and consumers amid the coronavirus pandemic.
Georgieva said that nearly 80 countries around the world requested the IMF's help amid the coronavirus crisis. The IMF strongly supports the "extraordinary" fiscal actions many countries have already taken and encourages further action by 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," she said.
The IMF stands ready to deploy its entire $1 trillion lending capacity, according to the statement. It is also replenishing its Catastrophe Containment and Relief Trust to help the poorest countries, and looking at all other available options to support its members.
Georgieva also noted that major central banks have initiated bilateral swap lines with emerging market countries, but that more members are needed to provide additional assistance as a global liquidity crunch takes hold. The group will explore a possible proposal to help facilitate a broader network of swap lines, including an IMF-swap type facility, according to the statement.
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