Covid-19 worst economic fallout since the Great Depression: IMF

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The managing director of the International Monetary Fund (IMF), Kristalina Georgieva, he anticipated that the crisis of the Covid-19 will bring the worst economic consequences from the Great Depression because it will be 170 countries have a negative growth of per capita income.

“Today we face a crisis like no other” he said to a few days to raise awareness in the framework of the Spring Meeting -which will be virtual – the Report of World Economic Outlook (WEO for its acronym in English).

He warned that the picture could get worse depending on many variables, such as the duration of the pandemic, so he insisted that countries should focus on four priorities:

  • Continue with key measures of containment and support for health systems.

  • To protect people and businesses affected by fiscal and financial measures that are timely and specific.

  • Reduce the stress of the financial system and prevent contagion.

Also read: These are the new recommendations for workers in the US before Covid-19

The grim perspective that sees the IMFhe added, applies both to the advanced economies and in development. This crisis has no borders, ” he said.

“It is expected a partial recovery in 2021,” said Georgieva in a speech delivered this morning under the title: “Facing the crisis: priorities for the global economy”.

He warned that as well as the health emergency it will affect people more fragile, in economic termsthe crisis will hit most vulnerable countries.

In fact, he stressed that in the past two months, the exit of capital from emerging countries, is more than 100 billion dollars, three times more than was recorded during the global financial crisis.

He emphasized that given the containment measures necessary to curb the spread of the virusthe global economy is taking a beating substantial.

The above is affecting small businesses, transportation and tourism, and in the majority of countries, workers are more exposed because they earn their living by their own.

Did you see that the emerging market countries and the nations of low-income, especially in Africa, Latin America and large part of Asia, have a high risk for health systems are weak, densely populated cities and poor neighborhoods where social distancing is not an option.

Georgieva mentioned that three months ago, the IMF estimated a positive growth of per capita income in more than 160 countries are members of the agency for this 2020.

Also read: Up to 26 thousand cases of coronavirus in Mexico, estimated ministry of Health

But today, that number has changed direction: “we Now project that more than 170 countries are experiencing negative growth in per capita income this year “.

On the possibilities of recovery, the official from the multilateral body said that it could be so partial.

“If the pandemic fades in the second half of the year, which allows for a gradual lifting of the containment measures and re-opening of the economy: our assumption is for a partial recovery in 2021”.

However, he clarified that there is a great uncertainty about the prospects; it could get worse depending on many factors and variables, including the duration of the pandemic.

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