IMF says $10 trillion has been spent battling coronavirus but more is needed
The global response to the coronavirus pandemic has cost governments around $10 trillion, but further efforts are needed to battle the outbreak, according to the head of the IMF.
New estimates suggest that up to 100m could fall into extreme poverty as a result of the pandemic, IMF managing director Kristalina Georgieva has said. She noted that it erased all gains made in poverty reduction across the globe in the past few years.
Given the severity of the crisis, Georgieva has said countries need to take further measures to prevent further job losses and higher inequality.
The IMF chief suggested additional fiscal stimulus will have to be deployed during the recovery phase to help growth. Pointing to the aftermath of 2008, Georgieva said: “We will need a similar surge in reforms and investments during the recovery phase to significantly improve the economic prospects of the most vulnerable.”
In an IMF blog, Georgieva said the fiscal stimulus must deliver for people, which means scaling up investment in health care, education and welfare. “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,” she added.
Coronavirus has infected 7.4m people and 417,514 have died, according to the latest data from Johns Hopkins university. The World Bank this week said the crisis would cut global output by 5.2 per cent and Georgieva has said that further cuts to the IMF’s forecasts are likely.
David Malpass, president of the World Bank, last week said coronavirus was a “devastating blow” for the global economy and said the fallout could last for a decade.