The already "sluggish" world economy before the COVID-19 outbreak, is now bound to suffer a "severe recession" in 2020, warns IMF (International Monetary Fund) chief Kristalina Georgieva and said the current crisis posed "daunting challenges" for policymakers in many emerging markets and developing economies.
Addressing the Development Committee Meeting during the annual Spring Meeting of the IMF and the World Bank, the IMF Managing Director said a large global contraction in the first half of this year was inevitable.
"A large global contraction in the first half of 2020 is inevitable. Prospects thereafter depend on the intensity and efficacy of containment efforts, progress with developing vaccines and therapies, the extent of supply disruptions, shifts in spending patterns, the impact of tighter financial conditions on activity, and the size of the policy response," Georgieva said.
She added the pandemic hit the world economy when it was already in a fragile state as it was weighed down by trade disputes, policy uncertainty and geopolitical tensions.
"The global coronavirus outbreak is a crisis that is like no other and poses daunting challenges for policymakers in many emerging market and developing economies (EMDEs), especially where the pandemic encounters weak public health systems, capacity constraints, and limited policy space to mitigate the outbreak's repercussions," she said.
She said that the world economy was in a "sluggish" recovery before the coronavirus outbreak, warning that it is now bound to suffer a "severe recession" in 2020.
She added that the medium termed projections were clouded by uncertainties.
"Medium-term projections are clouded by uncertainty regarding the pandemic's magnitude and speed of propagation, as well as the longer-term impact of measures to contain the outbreak, such as travel bans and social distancing," she said.
"The world economy was in a sluggish recovery before the coronavirus outbreak... and is now bound to suffer a severe recession in 2020," Georgieva added.
According to Johns Hopkins University data, the number of confirmed coronavirus cases surpassed two million globally and 144,000 people have died so far. The US is the worst hit from the pandemic with more than 700,000 COVID-19 cases and 35,000 deaths.