Washington: International Monetary Fund Managing Director Kristalina Georgieva said the global economic outlook has shifted to “more dire scenarios” as the coronavirus has spread undetected, though she added that it’s still difficult to predict the impacts.
“In terms of our projections, we unfortunately over the last week have seen a shift to a more adverse scenario for the global economy,” Georgieva told reporters at a briefing Wednesday in Washington alongside World Bank President David Malpass. Uncertainty will remain high as long as the outbreak duration is unknown, she said.
“It is, unfortunately, spreading undetected more than initially was thought,” Georgieva said. “The moment it became clear it is no more just about China and maybe a small number of countries in Asia surrounding China, then the outlook on what the impact could be changed.”
Georgieva said that the IMF is making available $50 billion to help countries deal with the virus, including $10 billion at zero interest for the poorest nations. Countries can draw on that money if they need it, she said Wednesday on Bloomberg Television.
The shift comes as governments and central banks step up emergency actions to protect against greater economic damage and financial-market instability, with the Bank of Canada on Wednesday joining the Federal Reserve in cutting interest rates by a half point. Global infections have topped 93,000, resulting in more than 3,200 deaths since the virus originated in Wuhan, China.
Georgieva said the virus demands a global response as it affects significant elements of both supply and demand, and IMF member nations are committed to coordinated action. She said that the IMF is confident that global growth this year will be slower than 2019, when growth was 2.9%. The IMF had previously seen 2020 growth accelerating to 3.3%.
Malpass, who on Tuesday announced a $12 billion immediate support package to help poorer countries confront the health and economic impacts from the spread of coronavirus, said 12 countries have so far expressed interest in participating. The speed and breadth of the response will be crucial to its success, he said at the briefing.
On Monday, the Washington-based organizations pledged in a joint statement to use “available instruments to the fullest extent possible, including emergency financing, policy advice, and technical assistance” to aid member countries as they respond to the virus.
Georgieva also said Wednesday that the IMF has conducted a dry run for the virtual format that will be used to convene their spring meetings next month with the World Bank instead of holding the conference in Washington.-Bloomberg