IMF Sees Developing Nations Needing $2.5 Trillion for Virus
A “Closed” sign is displayed outside of a business in New Rochelle, New York, U.S. (Photographer: Angus Mordant/Bloomberg)  

IMF Sees Developing Nations Needing $2.5 Trillion for Virus

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(Bloomberg) -- The International Monetary Fund said that it’s working to get aid to developing nations whose own resources will fall short of the $2.5 trillion that they need to address the coronavirus pandemic.

The fund has received inquiries or requests for aid from 50 emerging nations and 31 middle-income countries, Managing Director Kristalina Georgieva said in a webcast briefing Friday. She said the world economy is already in a recession that will be as bad or worse than the 2009 downturn and reiterated the IMF’s willingness to put its $1 trillion in resources to work.

“Our current estimate for the overall financial needs of emerging markets is $2.5 trillion,” she said, adding that the figure is a conservative estimate. “We do know that their own reserves and domestic resources will not be sufficient, and it is in this context that our members are asking us to do more, do it better and do it faster than ever before.”

Group of 20 leaders on Thursday pledged in a joint statement after a teleconference summit to inject more than $5 trillion into the global economy and do “whatever it takes” to overcome the pandemic.

Georgieva’s comments followed a conference call meeting of the International Monetary and Financial Committee, the main advisory panel of the IMF’s 189 member countries. The IMF is going beyond its traditional lending facilities and will explore additional options to help members that experience foreign exchange shortages, Georgieva said in a statement following the meeting.

World Bank President David Malpass said in a separate statement that he and Georgieva are working to flesh out an approach to debt relief for the world’s poorest countries that request forbearance. They plan to present the strategy in time for the Spring Meetings of the institutions, which will convene in a virtual format in mid-April, Malpass said.

“Beyond the health impact from the pandemic, we expect a major global recession,” Malpass said. “Poorer countries will take the hardest hit, especially ones that were already heavily indebted before the crisis.”

©2020 Bloomberg L.P.

Also read: IMF Sees Significant Cut in Sub-Saharan Africa Growth Over Virus

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