The International Monetary Fund (IMF) has doubled its emergency lending to $100bn to meet demand from countries in need of financial assistance while tackling the novel coronavirus.
IMF Managing Director Kristalina Georgieva said that the IMF anticipates the worst economic fallout since the Great Depression.
“There is no question that 2020 will be exceptionally difficult. If the pandemic fades in the second half of the year—thus allowing a gradual lifting of containment measures and reopening of the economy—our baseline assumption is for a partial recovery in 2021,” she explained.
She added that governments around the world are spending some $3tn to cushion the impact of the coronavirus.
“But again, I stress there is tremendous uncertainty around the outlook: it could get worse depending on many variable factors, including the duration of the pandemic,” she stressed.
Georgieva noted that the IMF Executive Board has just agreed to double access to emergency facilities, which will allow them to meet the expected demand of about $100bn in financing, adding that lending programs have already been approved, including for the Kyrgyz Republic, Rwanda, Madagascar, and Togo.
She said that more than 90 countries have requested assistance from the IMF since the outbreak of the coronavirus.
Georgieva outlined a series of steps that she said countries should take to combat the virus, which included prioritizing spending on health care and maintaining containment measures, as well as reducing supply chains and avoiding export restrictions on major supplies, a practice that has become more prominent as countries are trying to keep face masks, respirators, protective clothing, and medicines.
She praised the big, timely and financial incentives, adopting policies that include deferring taxes, wage subsidies and cash transfers to the most vulnerable, in addition to extending unemployment benefits and loan modifications.