IMF Expects ‘Worst Economic Fallout Since the Great Depression’

'Everybody hurts' says IMF chief as 170 economies head for recession

The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington on Sept. 4, 2018. (Yuri Gripas/Reuters)

The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, said Thursday that her organization views the CCP virus crisis as the worst economic shock since the Great Depression of the 1930s.

“Today, we are confronted with a crisis like no other,” said Georgieva in a statement. “COVID-19 has disrupted our social and economic order at lightning speed and on a scale that we have not seen in living memory ... What was normal just a few weeks ago—going to school, going to work, being with family and friends—is now a huge risk.”

The IMF head said it was essential to act decisively and in a coordinated manner to protect both lives and livelihoods from the fallout of the CCP (Chinese Communist Party) virus, commonly known as the novel coronavirus. “The actions we take now will determine the speed and strength of our recovery,” said Georgieva. The crisis, she said, is “a test of our humanity.”

Georgieva said that global growth would take a sharp turn into negative territory this year. “In fact, we anticipate the worst economic fallout since the Great Depression.”

From a position of relative strength at the start of the year, with 160 of the IMF’s member countries registering positive per capita income growth, the world economy has dipped alarmingly, with the organization now expecting 170 of its members to experience negative growth in 2020.

“The bleak outlook applies to advanced and developing economies alike,” said Georgieva. “This crisis knows no boundaries. Everybody hurts.” She said that the worst affected sectors included retail, tourism & hospitality, and transport, with the self-employed and small and medium-sized enterprises hardest hit.

4-Point Plan

Georgieva said the IMF would implement a four-point plan to help point the global economy toward recovery. The plan will include measures to fund combating the CCP virus, fiscal policies to aid people and businesses, the avoidance of contagion in the financial sector, and planning for recovery.

The IMF has $1 trillion in lending capacity ready for its members and is speeding up approval procedures. The organization is also joining with the World Bank to appeal for lenders to freeze debt payments from the most vulnerable economies.

“We don’t know yet how our economies and way of life will change, but we do know we will come out of this crisis more resilient,” said Georgieva.