$10 trillion already spent to combat COVID-19, More needed; IMF

IMF Managing Director Kristalina Georgieva stated that governments around the world have already expended $10 trillion in economic measures to compact the impact of the novel coronavirus pandemic with more funds needed for further assistance.

The head of the International Monetary Fund shared insights based on recent estimates which suggest that up to 100 million people could drop into extreme poverty as a result of the crisis and it will erase all the gains made the past three years towards poverty reduction.

The pandemic has affected almost 7.4 million people around the world and 415,545 have died. The World Bank forecasts that the coronavirus would decrease global output by 5.2% in 2020 which would be the lowest dip since the Second World War.

The IMF expected to update its forecasts on June 24. Georgieva said that additional cuts are “very likely” to the Fund’s April forecast for a 3% reduction in global output. To support a more comprehensive recovery, “substantial fiscal stimulus” should focus on reducing job losses and stopping a rise in inequality she suggested.

Investments should focus on increasing access to health care and education, strengthening climate protections and expanding the access of low-income households and small businesses to financial products and technology, Georgieva added.

“The COVID-19 crisis is inflicting the most pain on those who are already most vulnerable. This calamity could lead to a significant rise in income inequality”
Kristalina Georgieva
Managing Director – IMF

She is of the opinion that policymakers should act swiftly and carefully to foster a more inclusive recovery. New research by the IMF and the World Bank has shown that more impartial access was correlated with more robust and sustainable growth.

Transferring cash payments by governments into bank accounts using fintech and mobile phones could decrease the number of “unbanked” adults by 100 million globally from around 1.1 billion. Moreover, financially inclusive countries had a 2- to 3-percentage point advantage in gross domestic product growth, Georgieva observed.