|(FILES) In this file photo taken on February 10, 2020 International Monetary Fund Managing Director Kristalina Georgieva listens during an event at the World Bank in Washington, DC. – The world economy is facing “severe” economic damage from the coronavirus pandemic that could be even more costly than in 2009 and will require an unprecedented response, IMF chief Kristalina Georgieva said March 23, 2020. (Photo by Brendan Smialowski / AFP)|
“It is clear that we have entered a recession” that will be worse than in 2009 following the global financial crisis, she said in an online press briefing.
With the worldwide economic “sudden stop,” Georgieva said the fund’s estimate “for the overall financial needs of emerging markets is $2.5 trillion.”
But she warned that estimate “is on the lower end.”
Governments in emerging markets, which have suffered an exodus of the capital of more than $83 billion in recent weeks, can cover much of that, but “clearly the domestic resources are insufficient” and many already have high debt loads.
Over 80 countries, mostly of low incomes, have already have requested emergency aid from the International Monetary Fund, she said.
“We do know that their own reserves and domestic resources will not be sufficient,” Georgieva said, adding that the fund is aiming to beef up its response “to do more, do it better, do it faster than ever before.”
The IMF chief spoke to reporters following a virtual meeting with the Washington-based lender’s steering committee, when she officially requested an increase in the fund’s fast-deploying emergency facilities from their current level of around $50 billion.
She also welcomed the $2.2 trillion economic package approved by the US Senate, saying “it is absolutely necessary to cushion the world’s largest economy against an abrupt drop the economic activities.”