The International Monetary Fund has called for a “fully recharged” and “no regret” response to the novel coronavirus epidemic, as it made available $50 billion in emergency funding to support countries to cope with the crisis.
“With over one-third of our membership affected directly, this is no longer a regional issue – it is a global problem calling for a global response,” Kristalina Georgieva, chief of the 189-member global lender, said on Wednesday.
The outbreak has spread to nearly 80 countries and regions, claiming the lives of at least 3,000 people.
The IMF predicts the global economic growth to be below last year’s level of 2.9 percent, and it would update the forecast in the coming weeks, Georgieva told a joint news conference with World Bank President David Malpass on the coronavirus response.
“Unfortunately over the last week we’ve seen a shift to a more adverse scenario for the global economy,” Georgieva said. “Under any scenario, global growth in 2020 will drop below last year’s level. How far it will fall, and for how long, is difficult to predict.”
At a time of uncertainty, it is better to lean forward, better to do more than to not do enough, she said, adding that that also applies to health systems and to policy measures.
The aim should be to stress “no regret” actions that shorten and soften the economic impact, she said. “They should be timely and targeted to the sectors, businesses and households hardest hit.”
Georgieva said the IMF has about $1 trillion in overall lending capacity, including up to $10 billion rapid-disbursing emergency financing for low-income countries that can be accessed without a full-fledged IMF program, and about $40 billion for emerging markets that could potentially seek support.
“I called on member countries to help ensure that this facility is fully recharged and ready for the current crisis,” she said.
Georgieva said the IMF was encouraged by the restart of some production in China, which is now at around 60 percent recovered and would be increased to 90 percent in the coming weeks.
Asked to comment on US Treasury Secretary Steven Mnuchin’s indication Tuesday that US was not considering lower tariffs on imports from China in response to the coronavirus, Georgieva said, “We have taken a very consistent position that trade is good for growth, good for jobs, good for poverty reduction.”
“We need more than ever a strong economy, because we are faced with a tremendous challenge,” she told China Daily.
On Tuesday the World Bank announced it had made $12 billion available to help countries respond to the coronavirus threat. The funding will prioritize the poorest countries and those at high risk with low capacity, the global lender said in a statement.
“We want to really find ways to supplement and augment the availability of working capital, which is the capital companies need to import goods to build up or rebuild their inventories,” he told reporters Wednesday.
“The speed and breadth of the response is crucial to its effectiveness,” he said.
In the United States, where deaths from the COVID-19 outbreak rose to 11 on Wednesday, the House of Representatives agreed to provide $8.3 billion to fight the vast-spreading disease.