The virus causes “the worst economic consequences since the Great Depression”, according to the IMF

Le virus provoque «les pires conséquences économiques depuis la Grande Dépression», selon le FMI

“The worst economic consequences since the Great Depression” of 1929. This is the prognosis made by the director-general of the IMF on the impact of the pandemic of sars coronavirus on the global economy.

“Global growth will become sharply negative in 2020 “, said Kristalina Georgieva, without advancing figures.

“There are just three months, we expect a growth in income per capita for 160 of our member countries in 2020. Today (…) we project that more than 170 countries will experience a contraction in per capita income “, does it clear during his speech ahead of the spring meetings that will be held in virtual mode, by videoconference, in the next week.

While the coronavirus, the party of China in late 2019, does not stop to spread around the world, countries are facing “uncertainty extraordinary on the depth and duration of this crisis,” she insisted.

Accordingly, the Fund anticipates, at best, a “partial recovery” in 2021, on the condition that the pandemic fades in the second half of this year, and that containment measures can be lifted to allow a reopening of shops, restaurants, a recovery in tourism and consumption.

On the contrary, 2021 may be “worse” than 2020 if the pandemic were to last.

Without surprise, these are the workers the most vulnerable who suffer the most. In the United States, these are 10 million people who pointed to unemployment for the last two weeks of march.

The low-income countries or emerging economies in Africa, Latin America and Asia are ” high-risk “, continued Ms. Georgieva.

Over the last two months, capital outflows from emerging economies amounted to some $ 100 billion, more than triple that for the same period of the financial crisis of 2008.

Although the economic impact is particularly severe, Kristalina Georgieva has expressed that there was no dilemma between saving the life of the people and to safeguard the livelihoods.

For it, the number 1 priority should be to continue containment measures are essential and support health systems “.

It has also urged to continue to protect people and businesses with the budgetary measures and targeted financial such as grants, wages and salaries, tax allocations, the extension of unemployment insurance.

“We need to avoid that liquidity pressures do not become a solvency problem,” which would leave ” a scar on the global economy, which would make it much more difficult the recovery.”

8000 billion dollars

She also called on governments to prepare for the recovery. This requires to consider “carefully” the time when the restrictions will be lifted.

According to it, as the plans to stabilise the economy are taking effect and that the business activity will begin to normalize, it will be necessary to act quickly to boost the demand, ” via ” an action coordinated fiscal “.

The IMF recalled that it had 1000 billion dollars of lending capacity.

It was also recognized that countries had in the total of measures of economic aid, representing about 8000 billion dollars.

In the United States, the largest economy in the world, the president, Donald Trump has already enacted a massive package of aid to 2,200 billion dollars. However, with the forced shutdown of the activity of a multitude of small businesses, some economists expect a contraction of the gross domestic Product of up to 15% in the second quarter.

In France, the first data showed a collapse of GDP of 6 % in the first quarter, the worst quarterly performance since 1945.

At the same time, the main German economic institutes have forecast that Germany, the main economy of the euro zone, plunged 9.8% in the second quarter, double the contraction recorded in the first quarter of 2009 that followed the financial crisis.

The IMF should publish next Tuesday its forecast figures for the main countries and regions of the world.

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