IMF managing director: „This is a crisis like no other”

Kristalina Georgieva, IMF Managing Director – Exceptional Times, Exceptional Action: Opening Remarks for Spring Meetings Press Conference

„We anticipate the worst economic downturn since the Great Depression. While there is tremendous uncertainty around the forecast, we project global growth to fall to -3 percent this year. And we project a partial recovery in 2021, with growth expected at 5.8 per cent.

That is our baseline scenario. We know that it could get much worse depending on many variable factors, including the depth and duration of the pandemic.

In our Global Policy Agenda, which we are releasing today, we outline the measures needed to overcome this crisis. Let me highlight three priorities:

(1) First—protect lives. The fact is that you cannot have a healthy economy without a healthy population. This means continuing with essential containment measures and prioritizing health spending. It also means refraining from export controls on medical supplies and food.

(2) Second—protect livelihoods. We must prevent liquidity pressures from turning into solvency problems. This is about creating lifelines for households and businesses, from cash transfers to credit guarantees and adjustments to loan terms. Protecting livelihoods also requires a financial system that continues to function under pressure. Here, monetary stimulus and liquidity facilities play an indispensable role.

(3) Third—plan for recovery. We must reduce the risk of irreversible economic scarring through policy action now. In time, as the global economy stabilizes, coordinated fiscal stimulus will be needed to boost demand and restore growth. For its part, the IMF will support its member countries as they confront the post-crisis challenges, including debt vulnerabilities, bankruptcies, unemployment, and economic inequality.

The encouraging news is that so many countries have deployed extraordinary policy measures—including fiscal actions amounting to about $8 trillion and liquidity injections by central banks amounting to over $6 trillion. And yes, there has been substantial coordination. But given the gravity of the crisis, significant further efforts will be needed.

We are responding to an unprecedented number of calls for emergency financing—from more than 100 countries (out of 189 member countries ). We have just doubled access to our emergency facilities, which will allow us to meet the expected demand of about $100 billion in financing. Lending programs have already been approved at record speed for over 20 countries, with many more to come.”