{
  "title": "Potential Impact of the Coronavirus Epidemic: What We Know and What We Can Do",
  "publication": "IMF Blog, March 4, 2020",
  "sourceUrl": "https://www.imf.org/en/blogs/articles/2020/03/04/blog030420-potential-impact-of-the-coronavirus-epidemic",
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  "summary": "The disease is spreading quickly; with over one-third of our membership affected directly, this is no longer a regional issue—it is a global problem calling for a global response.",
  "sections": [
    {
      "heading": "What We Know",
      "content": "- The disease is spreading quickly; with over one-third of our membership affected directly, this is no longer a regional issue—it is a global problem calling for a global response.\n- The epidemic will eventually retreat, but the timing is unknown: \"we don’t know how fast this will happen.\"\n- The shock affects both supply and demand:\n  - Supply disruptions due to morbidity and mortality, containment efforts that restrict mobility, higher costs of doing business from restricted supply chains, and a tightening of credit.\n  - Demand falls due to higher uncertainty, increased precautionary behavior, containment efforts, and rising financial costs that reduce the ability to spend.\n- These effects will spill over across borders.\n- Under any scenario, global growth in 2020 will drop below last year’s level; how far it will fall, and for how long, is difficult to predict and depends on the epidemic and the timeliness and effectiveness of actions.\n- Experience suggests about one-third of the economic losses from the disease will be direct costs (loss of life, workplace closures, quarantines); the remaining two-thirds will be indirect, reflecting retrenchment in consumer confidence and business behavior and a tightening in financial markets.\n- Financial systems are more resilient than before the Global Financial Crisis, but uncertainty is the biggest current challenge.\n- Countries with weaker health systems and response capacity are particularly challenged, calling for a global coordination mechanism to accelerate recovery of demand and supply."
    },
    {
      "heading": "How to Respond at the Country Level (Policy Recommendations)",
      "content": "- Prioritize front-line health-related spending to:\n  - Protect people’s wellbeing.\n  - Take care of the sick.\n  - Slow the spread of the virus.\n  - Ensure production of medical supplies so that supply meets demand.\n- Implement macro-financial policy actions to tackle supply and demand shocks:\n  - Aim for \"no regret\" actions that shorten and soften the economic impact.\n  - Ensure policies are timely and targeted to the sectors, businesses, and households hardest hit.\n- If demand weakens broadly through confidence and spillover channels (trade and tourism, commodity prices, tighter financial conditions), provide additional policy response to support demand and ensure adequate supply of credit.\n- Ensure adequate liquidity to offset financial stability risks.\n- Stand ready to provide a more forceful, coordinated response if conditions require it; international cooperation (e.g., G7 readiness to cooperate on timely and effective measures) is welcomed."
    },
    {
      "heading": "How the Fund Can Help (Resources and Facilities)",
      "content": "- The IMF is making available about $50 billion through its rapid-disbursing emergency financing facilities for low-income and emerging market countries that could potentially seek support.\n  - Of this, $10 billion is available at zero interest for the poorest members through the Rapid Credit Facility.\n- The Fund has about $1 trillion in overall lending capacity.\n- For low-income countries, rapid-disbursing emergency financing of up to $10 billion (50 percent of quota of eligible members) can be accessed without a full-fledged IMF program.\n- Other members can access emergency financing through the Rapid Financing Instrument; this facility could provide about $40 billion for emerging markets that could potentially approach the IMF for financial support.\n- The Catastrophe Containment and Relief Trust (CCRT) provides eligible countries with up-front grants for relief on IMF debt service falling due; the CCRT proved effective during the 2014 Ebola outbreak but is underfunded with just over $200 million available against possible needs of over $1 billion. A call is made for member countries to help ensure the facility is fully re-charged and ready for the current crisis.\n- IMF staff are working to identify vulnerable countries and estimate potential financing needs should the situation deteriorate further.\n- The Fund is fully committed to supporting member countries, particularly the most vulnerable; it states: \"we have the tools to help; and we are coordinating closely with our partner institutions.\"\n\nSource: Kristalina Georgieva, March 4, 2020 — Potential Impact of the Coronavirus Epidemic: What We Know and What We Can Do (IMF blog)\n\n---\n\n\n References\n\n- عربي\n- 日本語\n- Português\n- Coronavirus Economic Planning: Hoping for the Best, Prepared for the Worst\n- Monetary and Financial Stability During the Coronavirus Outbreak\n- Limiting the Economic Fallout of the Coronavirus with Large Targeted Policies\n- Fiscal Policies to Protect People During the Coronavirus Outbreak\n- Questions and Answers on the IMF’s $50 billion Rapid-disbursing Emergency Financing Facilities\n- IMF Factsheet: How the IMF Can Help Countries Address the Economic Impact of Coronavirus\n\nSource: https://www.imf.org/en/blogs/articles/2020/03/04/blog030420-potential-impact-of-the-coronavirus-epidemic"
    }
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    "[Markdown version](/en/blogs/articles/2020/03/04/blog030420-potential-impact-of-the-coronavirus-epidemic/index.md)",
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    "Authors: Kristalina Georgieva",
    "Published: March 4, 2020",
    "The disease is spreading quickly; with over one-third of our membership affected directly, this is no longer a regional issue—it is a global problem calling for a global response.",
    "The epidemic will eventually retreat, but the timing is unknown: \"we don’t know how fast this will happen.\"",
    "The shock affects both supply and demand:",
    "These effects will spill over across borders.",
    "Under any scenario, global growth in 2020 will drop below last year’s level; how far it will fall, and for how long, is difficult to predict and depends on the epidemic and the timeliness and effectiveness of actions.",
    "Experience suggests about one-third of the economic losses from the disease will be direct costs (loss of life, workplace closures, quarantines); the remaining two-thirds will be indirect, reflecting retrenchment in consumer confidence and business behavior and a tightening in financial markets.",
    "Financial systems are more resilient than before the Global Financial Crisis, but uncertainty is the biggest current challenge.",
    "Countries with weaker health systems and response capacity are particularly challenged, calling for a global coordination mechanism to accelerate recovery of demand and supply.",
    "Prioritize front-line health-related spending to:",
    "Implement macro-financial policy actions to tackle supply and demand shocks:",
    "If demand weakens broadly through confidence and spillover channels (trade and tourism, commodity prices, tighter financial conditions), provide additional policy response to support demand and ensure adequate supply of credit.",
    "Ensure adequate liquidity to offset financial stability risks.",
    "Stand ready to provide a more forceful, coordinated response if conditions require it; international cooperation (e.g., G7 readiness to cooperate on timely and effective measures) is welcomed.",
    "The IMF is making available about $50 billion through its rapid-disbursing emergency financing facilities for low-income and emerging market countries that could potentially seek support.",
    "The Fund has about $1 trillion in overall lending capacity.",
    "For low-income countries, rapid-disbursing emergency financing of up to $10 billion (50 percent of quota of eligible members) can be accessed without a full-fledged IMF program.",
    "Other members can access emergency financing through the Rapid Financing Instrument; this facility could provide about $40 billion for emerging markets that could potentially approach the IMF for financial support.",
    "The Catastrophe Containment and Relief Trust (CCRT) provides eligible countries with up-front grants for relief on IMF debt service falling due; the CCRT proved effective during the 2014 Ebola outbreak but is underfunded with just over $200 million available against possible needs of over $1 billion. A call is made for member countries to help ensure the facility is fully re-charged and ready for the current crisis.",
    "IMF staff are working to identify vulnerable countries and estimate potential financing needs should the situation deteriorate further.",
    "The Fund is fully committed to supporting member countries, particularly the most vulnerable; it states: \"we have the tools to help; and we are coordinating closely with our partner institutions.\"",
    "[عربي](https://www.imf.org/ar/News/Articles/2020/03/10/blog-potential-impact-of-the-coronavirus-epidemic)",
    "[日本語](http://www.imf.org/ja/News/Articles/2020/03/04/blog030420-potential-impact-of-the-coronavirus-epidemic)",
    "[Português](http://www.imf.org/pt/News/Articles/2020/03/04/blog030420-potential-impact-of-the-coronavirus-epidemic?sc_mode=1)",
    "[Coronavirus Economic Planning: Hoping for the Best, Prepared for the Worst](https://blogs.imf.org/2020/03/12/coronavirus-economic-planning-hoping-for-the-best-prepared-for-the-worst/)",
    "[Monetary and Financial Stability During the Coronavirus Outbreak](https://blogs.imf.org/2020/03/11/monetary-and-financial-stability-during-the-coronavirus-outbreak/)",
    "[Limiting the Economic Fallout of the Coronavirus with Large Targeted Policies](https://blogs.imf.org/2020/03/09/limiting-the-economic-fallout-of-the-coronavirus-with-large-targeted-policies/)",
    "[Fiscal Policies to Protect People During the Coronavirus Outbreak](https://blogs.imf.org/2020/03/05/fiscal-policies-to-protect-people-during-the-coronavirus-outbreak/)",
    "[Questions and Answers on the IMF’s $50 billion Rapid-disbursing Emergency Financing Facilities](https://www.imf.org/en/About/FAQ/50-billion-rapid-disbursing-emergency-financing-facilities/)",
    "[IMF Factsheet: How the IMF Can Help Countries Address the Economic Impact of Coronavirus](https://www.imf.org/en/About/Factsheets/Sheets/2020/02/28/how-the-imf-can-help-countries-address-the-economic-impact-of-coronavirus/)"
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  "generatedAtUtc": "2026-08-27T16:48:05.625Z"
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