News ID: 269100
Published: 0827 GMT May 16, 2020

IMF chief predicts three-year economic hit from coronavirus

IMF chief predicts three-year economic hit from coronavirus
IMF Managing Director Kristalina Georgieva (MIKE THEILER/REUTERS)

The head of the International Monetary Fund predicted it could take until 2023 for the global economy to return to its pre-coronavirus levels. “The most severe shock has already occurred,” IMF Managing Director Kristalina Georgieva said at a POLITICO virtual event, noting that 170 countries have entered negative economic growth since March.

 

Georgieva said she expects the global economy to shrink further beyond the current IMF estimate of -3 percent GDP in 2020, before a “partial recovery” in 2021, politico.com reported.

The economic rupture is causing the IMF to throw out some of its old advice and adopt the posture of global social justice warrior, instead.

Struggling and bankrupt governments have long-dreaded IMF conditions on lending, including strict limits on government outlays and privatizing assets, but while Georgieva still urges governments to “spend wisely,” the emphasis is now very much on the spending.

“Spend as much as you can, and then spend a bit more for your doctors, for your nurses, for the vulnerable people in your society,” she said.

The IMF is also attaching green conditions to its financial assistance and Georgieva pushes gender equality at every opportunity. “We are richer when women are equal,” she said.

While Georgieva has more leverage than any IMF leader before her — lending capacity at the DC-based NGO has quadrupled to $1 trillion since 2008 — she still operates within strict constraints largely determined by the United States, the IMF’s largest shareholder.

Organizations as diverse as Goldman Sachs, Oxfam and AFL-CIO are now urging governments to authorize the IMF to deliver $3 trillion in support to low- and middle-income countries, via a special asset class known as Special Drawing Rights. But Georgieva needs US support before the IMF can come to the rescue.

“Everything has to be on the table” when it comes to responding to the coronavirus pandemic, Georgieva said, but “my focus is and will continue to be to keep the membership together.” That’s code for keeping the Trump administration at the table, something other international bodies such as the World Health Organization and World Trade Organization have increasingly failed to do.

   
KeyWords
 
Comments
Comment
Name:
Email:
Comment:
Security Key:
Captcha refresh
Page Generated in 0/4806 sec