More than 80 countries have already applied for emergency aid from the IMF, most of them low-income nations, IMF’s director said.
The coronavirus pandemic has driven the global economy into a downturn that will require massive funding to help developing nations, the director of the International Monetary Fund (IMF) Kristalina Georgieva said Friday.
"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 "we believe this is on the lower end."
Governments in emerging markets, which have experienced a capital drain of more than $83 billion in recent weeks, can meet much of these needs, but clearly will not have sufficient resources, mainly since many were heavily indebted before the crisis.
More than 80 countries have already applied for emergency aid from the IMF, most of them low-income nations, Georgieva said.
"We know that its own reserves and domestic resources will not be sufficient," she said, adding that the IMF aims to strengthen its response "to do more, do better and do it faster than ever."
Georgieva spoke to journalists after a virtual meeting with the Washington-based IMF steering committee, at which she formally called for an increase in the fund's emergency rapid deployment instruments, that are currently at a level of $50 billion.
The IMF's director also welcomed the $2 trillion U.S. economic stimulus package, approved by the Senate and discussed by the House of Representatives this Friday. President Donald Trump must then promulgate it for it to take effect.
"It is absolutely necessary to protect the world's largest economy from a sharp drop in economic activities," she said.
The new coronavirus, COVID-19, has infected more than half a million people and killed 20,000, the head of the World Health Organization (WHO), Tedros Adhanom Ghebreyesus, said on Friday as he appealed again for protective gear for medical staff working to save lives.
Since the beginning of the epidemic, according to the latest data from the U.S.-based Johns Hopkins University, more than 585,040 cases of contagion have been recorded in at least 188 countries or territories, of which around 128,740 cases have been recovered. However, the numbers of infections continue to increase every day.
Several experts have already been warning last week, their concern about the economic repercussions that could leave the new coronavirus, mainly in the most vulnerable regions such as Latin America and Africa, which in turn have shown to be less prepared to face the virus. Some countries in these regions lack the equipment or even trained health workers to respond to the emergency demanded by COVID-19.