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Economic Impact Of Virus Pandemic Worse Than 2008 Financial Crissi, Says IMF Chief

Economic Impact Of Virus Pandemic Worse Than 2008 Financial Crissi, Says IMF Chief
An economic crisis “like no other” has been caused by the coronavirus pandemic – and the crisis is “way worse” than the 2008 global financial crisis, said a top official of the International Monetary Fund.
“Never in the history of the IMF have we witnessed the world economy come to a standstill,” Kristalina Georgieva, managing director of the IMF, said at a news conference.
He current situation was described as “humanity’s darkest hour, a big threat to the whole world and it requires from us to stand tall, be united and protect the most vulnerable of our citizens” by Georgieva while speaking at the World Health Organization’s headquarters in Geneva.
The coronavirus pandemic has infected more than 1 million people in almost every country all over the world and has resulted in the death of more than 55,000 people globally, and the IMF, along with the World Bank and other international financial institutions, are working closely to reduce the economic impact of the pandemic, Georgieva said. Central banks of developed economies are being encouraged by the IMF to offer support to the emerging markets and developing countries, she added.
“Our main preoccupation in this crisis is to rapidly step up financing for countries, especially emerging markets, developing countries that are faced with very significant and growing needs,” Georgieva said.
She said that the IMF has a corpus of $1 trillion for emergency purposes. “We are determined to use as much of it as necessary,” she said.
She added that applications for help from those funds have been made to the IMF by more than 90 countries already.
“We have never seen ever such a growing demand for emergency financing,” Georgieva said.
Countries should channelize their financial resources for the payment of doctors, nurses and other health-care workers and for other needs in the health segment, she stressed.
If countries hurry into lifting of quarantine restrictions set in place to prevent the spread of covid-19 – the disease caused by the coronavirus, it could lead to an “even more severe and prolonged” economic downturn, warned, WHO Director-General Tedros Adhanom Ghebreyesus.
“We are all aware of the profound social and economic consequences of the pandemic,” Tedros said. “Ultimately the best way for countries to end restrictions and ease their economic effects is to attack the virus,” he added.
The pandemic will hit the developing economies the worst since such countries often gave a lack of enough resources for protecting themselves from the economic shock of the pandemic, Georgieva said.
“We know that in many countries health systems are weak,” she said.
She said that “a flight to safety” by investors is also set to compound the problem because such investors take out investment from countries to seek safer investments with the spread of the outbreak. She said that during the outbreak, almost $90 billion in investments have “flown out” from many of the emerging economies.
Georgieva noted that, “This is way more than during the global financial crisis, and some countries are highly dependent on commodities exports. With prices collapsing, they are hit yet again.”
“The same way that the virus hits vulnerable people with medical preconditions hardest, the economic crisis hits vulnerable economies the hardest,” she said.

Christopher J. Mitchell

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