The International Monetary Fund is warning that 2020 could see a severe recession “at least as bad during the global financial crisis or worse” even as recovery would be expected in 2021.
IMF Managing Director Kristalina Georgieva made the comments after a phone call of G20 Finance Ministers and Central Bank Governors on Monday.
Georgieva said in a statement: “The economic impact is and will be severe, but the faster the virus stops, the quicker and stronger the recovery will be.
“Advanced economies are generally in a better position to respond to the crisis.”
Georgieva, however, warned that many emerging markets and low-income countries face “significant challenges,” noting there are already capital outflows from poorer nations.
The IMF said it will step up aid to countries in need, while calling on central banks to create additional swap lines to prevent liquidity crisis in emerging markets and poorer nations.
Many of the world’s wealthiest nations have already established swap lines, including with the US Federal Reserve.