Depth of economic slowdown depends on response – IMF

WASHINGTON, USA – The severity of the slowdown in the global economy due to the coronavirus pandemic will depend on how long it lasts and how governments respond, the International Monetary Fund (IMF) said Thursday, March 12.

“Under any scenario, the global growth in 2020 will drop below last year’s level, which was 2.9%,” IMF spokesman Gerry Rice told reporters. But how far will it fall is “difficult to predict, at this point, obviously, given the uncertainty.”

“It depends, of course, on the spread, the propagation of the outbreak. It depends on the measures taken to respond and how effective they are.”

Private economists have been warning of the possibility of a steep decline in United States and global economies that could amount to a worldwide recession. IHS Markit this week slashed its forecast for global growth to 1.7%.

The IMF is due to release its updated World Economic Outlook next month. In January, the fund was still projecting growth would accelerate to 3.3%, but that was before the global disruptions, countrywide shutdowns, and plunging oil prices hit.

IMF officials have been urging a strong, coordinated global response, including rolling out spending measures to cushion the blow from the virus.

“International cooperation is essential to effectively address the coronavirus outbreak,” Rice said.

“This is not something that stops at national borders, we need to work together.”

The fund has said it could rapidly deploy up to $50 billion, some in no or low-cost loans, to the world’s poorest countries.

Rice said the IMF has received requests from a number of countries, including Iran, and is “proceeding expeditiously with all requests.” – Rappler.com