IMF: Global effort needed to help economies recover

The Chief Economist for the International Monetary Fund says nations need to be prepared to work together "to ensure that the world does not deglobalize" as the global economy tries to recover from the coronavirus pandemic.

"Domestic and international policy responses need to be large, rapidly deployed and speedily recalibrated as new data becomes available," said Chief Economist Gita Gopinath.

"The courageous actions of doctors and nurses around the world need to be matched by policymakers so we can jointly overcome the crises."

This comes as the IMF forecast a bleak outlook for 2020.

The IMF said Tuesday that it expects the global economy to shrink 3% this year - far worse than its 0.1% dip in the Great Recession year of 2009 - before rebounding in 2021 with 5.8% growth. It acknowledges, though, that prospects for a rebound next year are clouded by uncertainty.

Just three months ago, the IMF had forecast that more than 160 countries would register income growth on a per-capita basis. Now, it expects negative per-capita income growth this year in 170 countries.

Some countries can't afford sufficiently aggressive rescue plans, the IMF said, and “may require external support." Georgieva has said that the IMF is prepared to commit its $1 trillion in lending capacity to support nations that need help in dealing with the pandemic.

The IMF cautioned Tuesday that its latest forecast is shrouded by unknowns.

They include the path that the virus will take; the effectiveness of policies meant to contain the outbreak and minimize the economic damage; and uncertainty over whether, even many months from now, people will continue to isolate themselves and depress spending as a precaution against a potential resurgence of the virus.

For most people, the new coronavirus causes mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia and death.The vast majority of people recover from the new virus.

(Image Credit: AP)