International World IMF chief: 'Clear we have entered recession'

IMF chief: ‘Clear we have entered recession’

With the worldwide economic "sudden stop," Georgieva said the fund's estimate "for the overall financial needs of emerging markets is $2.5 trillion." 

Author

Date

Category

- Advertisement -

The coronavirus pandemic has driven the global economy into a downturn that will require massive funding to help developing nations, IMF chief Kristalina Georgieva said Friday.

“It is clear that we have entered a recession” that will be worse than in 2009 following the global financial crisis, she said in an online press briefing.

With the worldwide economic “sudden stop,” Georgieva said the fund’s estimate “for the overall financial needs of emerging markets is $2.5 trillion.”

But she warned that estimate “is on the lower end.”

- Advertisement -

Governments in emerging markets, which have suffered an exodus of capital of more than $83 billion in recent weeks, can cover much of that, but “clearly the domestic resources are insufficient” and many already have high debt loads.

Over 80 countries, mostly of low incomes, have already have requested emergency aid from the International Monetary Fund, she said.

“We do know that their own reserves and domestic resources will not be sufficient,” Georgieva said, adding that the fund is aiming to beef up its response “to do more, do it better, do it faster than ever before.”

She also welcomed the $2.2 trillion economic package approved by the US Senate, saying “it is absolutely necessary to cushion the world’s largest economy against an abrupt drop the economic activities.”

The US package also is important because it accelerated Washington’s $78 billion contribution to the IMF’s lending capacity. The fund membership in January approved a plan to double one of its funding baskets — the New Arrangements to Borrow — to about $500 billion.

“The U.S. decision to speed up approval of its substantial new contributions to the IMF is a powerful message to the international community and helps solidify the IMF’s (overall) US$1 trillion lending capacity,” Georgieva said in a statement after the House of Representatives approved the massive rescue package.

President Donald Trump signed the measure into law Friday evening.

It provides direct cash payments to Americans, a huge expansion of unemployment benefits, and grants and loans to businesses to help them weather the economic shutdown.

The IMF chief spoke to reporters following a virtual meeting with the Washington-based lender’s steering committee, when she also requested an increase in the fund’s fast-deploying emergency facilities from their current level of around $50 billion.

hs/ch

© Agence France-Presse

/AFPFollow us on Social Media

Send in your scoops to news@theindependent.sg 

- Advertisement -

Leong Mun Wai rudely shut down by DPM Heng and Speaker Tan Chuan-Jin

Singapore -- Deputy Prime Minister Heng Swee Keat and Speaker of Parliament Tan Chuan-Jin rudely cut short Non-Constituency MP Leong Mun Wai's questions during the debate on the Significant Infrastructure Government Loan Act (Singa) Bill on Monday (May 10). Mr Leong noted...

How did Singapore grow?

Call it a series of coincidences but my maternal granduncle passed away. While the timing was not something he planned, his death took place a day or two after Singapore Press Holding’s (SPH) CEO, Mr Ng Yat Chung, gave his now...

Shanmugam challenges opposition to debate on CECA, leaders respond

Singapore— Law and Home Affairs Minister K Shanmugam ended a speech in  Parliament on Tuesday (May 11) by challenging Non-Constituency MP Leong Mun Wai to a debate on CECA, the India-Singapore Comprehensive Economic Cooperation Agreement.  Mr Leong, who is from the Progress...
Follow us on Social Media

Send in your scoops to news@theindependent.sg 

Theindependent