IMF Managing Director Kristalina Georgieva predicts the onset of a deeper recession than in 2009 due to the coronavirus pandemic. She stated this in her video address on March 27, following a meeting of representatives of the IMF governing body, the International Monetary and Financial Committee.
“We have revised the growth prospects for 2020 and 2021. Now it has become clear that we have entered a recession - the same bad or worse than in 2009,” the head of the IMF said.
According to her, the Fund is working on a project to restore economies in 2021. At the moment, it is important to localize the coronavirus, and to prevent the transformation of liquidity problems into a solvency problem. The main concern of the IMF is the risk of a wave of bankruptcies and layoffs that can not only undermine recovery, but also destroy the structure of society.
Georgieva said that recently the Fund has received more than 80 emergency funding requests from different countries. On March 26, the IMF Executive Board approved the first of these emergency requests for the Kyrgyz Republic. The Fund does not intend to stop on this, because it outlined four key areas for work to prevent the impact of the coronavirus pandemic on the economy.
Firstly, the Fund proposes to double its emergency financing capabilities, simplify processes and fill the gap in concessional financing.
Secondly, the IMF is revising its lending instruments, with the possibility of expanding the use of protective credit lines or providing short-term liquidity reserves.
Third, on March 26 the Board approved changes to the application of the Disaster Protection Trust Fund, which could ease the debt burden for the poorest IMF member countries.
On March 27, it became known that Ukraine agreed with the IMF to increase financing programs to $ 8 billion.
President Zelensky in negotiations with the International Monetary Fund raised the issue of debt restructuring in Ukraine.