IMF Says Coronavirus Recession Could Be Worse Than 2009

The world economy is facing "severe" economic damage from the coronavirus pandemic that could be even more costly than in 2009 and will require an unprecedented response, said IMF (International Monetary Fund) chief Kristalina Georgieva.

In her statement to finance ministers following a G20 Ministerial Call on the Coronavirus Emergency, Georgieva said that the outlook for global growth for 2020 is negative. "A recession at least as bad as during the global financial crisis or worse," she said.

"But we expect recovery in 2021. To get there, it is paramount to prioritize containment and strengthen health systems-everywhere. The economic impact is and will be severe, but the faster the virus stops, the quicker and stronger the recovery will be," Georgieva added.

She also called on advanced economies to provide more support to low-income countries, and said that the IMF stands "ready to deploy all our $1 trillion lending capacity."

Speaking on the preparedness of the countries, Georgieva said that "advanced economies are generally in a better position to respond to the crisis, but many emerging markets and low-income countries face significant challenges. They are badly affected by outward capital flows, and domestic activity will be severely impacted as countries respond to the epidemic. Investors have already removed US$83 billion from emerging markets since the beginning of the crisis, the largest capital outflow ever recorded. We are particularly concerned about low-income countries in debt distress-an issue on which we are working closely with the World Bank."

"These are extraordinary circumstances. Many countries are already taking unprecedented measures. We at the IMF, working with all our member countries, will do the same. Let us stand together through this emergency to support all people across the world," she added.