The International Monetary Fund (IMF) Managing Director Kristalina Georgieva said Thursday that the multilateral lender now projects that over 170 countries will experience negative per capita income growth this year.
In her curtain raiser speech ahead of the Spring Meetings next week, the IMF chief said in a video that countries across the globe “are confronted with a crisis like no other.”
“COVID-19 has disrupted our social and economic order at lightning speed and on a scale that we have not seen in living memory,” Georgieva said.
The IMF managing director said it is already clear that global growth will turn “sharply negative” in 2020.
Georgieva, however, noted that the crisis is expected to hit vulnerable countries hardest. “Emerging markets and low-income nations – across Africa, Latin America, and much of Asia – are at high risk,” she said.
In the last two months, portfolio outflows from emerging markets were about 100 billion U.S. dollars, more than three times larger than for the same period of the global financial crisis, she noted.
Noting that the IMF estimates the gross external financing needs for emerging market and developing countries to be in the trillions of dollars, the IMF chief said “they urgently need help.”
Georgieva said: “We anticipate the worst economic fallout since the Great Depression. Just three months ago, we expected positive per capita income growth in over 160 of our member countries in 2020. Today, that number has been turned on its head: we now project that over 170 countries will experience negative per capita income growth this year.
“If the pandemic fades in the second half of the year – thus allowing a gradual lifting of containment measures and reopening of the economy – our baseline assumption is for a partial recovery in 2021. But again, I stress there is tremendous uncertainty around the outlook: it could get worse depending on many variable factors, including the duration of the pandemic.”