IMF urges countries to spend all they can during Coronavirus pandemic

The IMF is laying out a plan for countries to follow as a roadmap to recovery. IMF Managing Director Kristalina Georgieva outlined the difficult economic environment countries are facing because of the Covid-19 epidemic and her Global Plan of Action to take it on at a virtual press conference to open the 2020 Spring Meetings Wednesday (April 15) in Washington, DC.

“It is a crisis like no other in scope. We are now in the worst recession since the Great Depression. We are experiencing a 3 percent contraction of global GDP. And 170 countries are going to see income per capita falling versus what we expected three months ago for a 160 for them to go up.”

Georgieva encouraged leaders to protect lives and livelihoods during this difficult phase. Lifelines for households and businesses should be provided to prepare for the time of recovery, she said. 

“Making sure that our financial system continues to function – it matters. And what we have seen is central banks providing ample liquidity. Eight trillion dollars of fiscal measures. So our message is: spend as much as you can but keep the receipts. We don’t want accountability and transparency to take a backseat in this crisis.”

Georgieva compared the increased vulnerability of people with preconditions to the vulnerability of economies that already had preexisting difficulties prior to the pandemic.

“It is a really difficult time for everybody. But in particular, it is difficult for countries that already stepped into this crisis with complex challenges. The same way the virus hits people with existing preconditions that are more vulnerable, the hardest. It hits economies with preexisting difficulties, the hardest.” 

Georgieva reiterated that the IMF would be looking at all options to help countries in need.  

“We are telling everybody: do all you can. And I just want to assure you that we are following ourselves on our own advice. Everything is on the table in terms of measures we can take. What we do is: first, do all we can with the resources we have. Second, make sure that there are no gaps in what we have to be of service to the membership.”

Read the Managing Director’s Opening Remarks for the 2020 Spring Meetings here 

Tune into the IMF’s Spring Meetings here