IMF makes available $50 billion to help address Coronavirus
March 4, 2020
As Prepared for Delivery
The IMF is making available about $50 billion through its
rapid-disbursing emergency financing facilities
for low income and emerging market countries that could potentially
seek support. Of this, $10 billion is available at zero interest for
the poorest members through the Rapid Credit Facility.
Opening Remarks by IMF Managing Director Kristalina Georgieva at Joint Press Conference with World Bank Group President David Malpass on the Coronavirus Response
Good morning! David Malpass and I got an early start today with a 7 am
conference call of the IMFC—our governing body representing our 189 member
Before I go any further, let me express my deepest sympathies for all the
suffering that the outbreak is causing.
We all recognize that the situation with the spread of the coronavirus is
very serious and could well get worse. This affects us all.
I will start by setting out why I felt it was necessary to have this
- First, to place our scenarios about the potential impact on the
global economy in the context of what we know and what we don’t yet know
about the coronavirus;
- Second, to concentrate on a framework for how to think about the
shock and how we – the membership, the Fund, and other global institutions
– can support those affected by this crisis in an effective and coordinated
- Third, in that spirit of cooperation to learn from each other,
especially from those most exposed to the outbreak.
What We Know
We know that the disease is spreading quickly. 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.
We also know that it will eventually retreat, but we don’t know how fast
this will happen.
We know that this shock is somewhat unusual as it affects significant
elements of both supply and demand:
- Supply will be disrupted due to morbidity and mortality, but also the
containment efforts that restrict mobility and higher costs of doing
business due to restricted supply chains and a tightening of credit.
- Demand will also fall due to higher uncertainty, increased precautionary
behavior, containment efforts, and rising financial costs that reduce the
ability to spend.
- These effects will spill over across borders.
Experience suggests that about one-third of the economic losses from the
disease will be direct costs: from loss of life, workplace closures, and
quarantines. The remaining two-thirds will be indirect, reflecting a
retrenchment in consumer confidence and business behavior and a tightening
in financial markets.
The good news is that financial systems are more resilient than before
the Global Financial Crisis. However, our biggest challenge right now is
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, and
would depend on the epidemic, but also on the timeliness and effectiveness
of our actions.
This is particularly challenging for countries with weaker health systems
and response capacity—calling for a global coordination mechanism to
accelerate the recovery of demand and supply.
How to Respond at the Member Level
The number one priority in terms of fiscal response is ensuring
front-line health-related spending to protect people’s wellbeing, take care
of the sick, and slow the spread of the virus. I can’t emphasize enough the
urgency of stepping up health-related measures—and the need to ensure the
production of medical supplies so that supply is at par with demand.
Second, macro-financial policy actions may be required to tackle the
supply and demand shocks that I mentioned above. The aim should “no regret”
actions that shorten and soften the economic impact. They should be timely
and targeted to the sectors, businesses and households hardest hit.
A generalized weakening in demand through confidence and spillover
channels—including trade and tourism, commodity prices, and tighter
financial conditions—would call for an additional policy response to
support demand and ensure an adequate supply of credit.
Third, adequate liquidity will also be needed to offset financial
In short: the situation is evolving rapidly and we should stand ready to
provide a more forceful, coordinated response if conditions require it.
Along these lines, I welcome the statement from the G7 yesterday that they
are ready to cooperate further on timely and effective measures.
How the Fund Can Help
For our part, the Fund is ready to help its membership.
There are many members at risk, including those with weak health systems,
inadequate policy space, commodity exporters exposed to terms-of-trade
shocks, and others that are particularly vulnerable to spillovers.
I am particularly concerned about our low-income and more vulnerable
members – these countries may see financing needs rise rapidly as the
economic and human cost of the virus escalates.
Our staff are currently working on identifying vulnerable countries and
estimating potential financing needs should the situation deteriorate
The Fund has resources available to support the membership:
- Thanks to the generosity of our shareholders, we have about $1 trillion
in overall lending capacity.
- For low-income countries, we have rapid-disbursing emergency financing of
up to $10 billion (50 percent of quota of eligible members) that can be
accessed without a full-fledged IMF program.
- Other members can access emergency financing through the Rapid
Financing Instrument. This facility could provide about $40 billion for
emerging markets that could potentially approach us for financial
- We also have the Catastrophe Containment and Relief Trust – the CCRT –
which provides eligible countries with up-front grants for relief on IMF
debt service falling due. The CCRT proved to be effective during the 2014
Ebola outbreak, but is now underfunded with just over $200 million
available against possible needs of over $1 billion. I called on member
countries to help ensure that this facility is fully re-charged and ready
for the current crisis.
Our united message to the public is:
- The Fund is fully committed to supporting our member countries,
particularly the most vulnerable;
- We have the tools to help; and
- We are coordinating closely with our partner institutions.
Thank you again and now over to you, David.
IMF Communications Department
PRESS OFFICER: Alistair Thomson
Phone: +1 202 623-7100Email: MEDIA@IMF.org