{
  "title": "Confronting the Crisis: Priorities for the Global Economy",
  "publication": "IMF News, April 9, 2020",
  "sourceUrl": "https://www.imf.org/en/news/articles/2020/04/07/sp040920-sms2020-curtain-raiser",
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  "summary": "COVID-19 has disrupted social and economic order at lightning speed and on a scale not seen in living memory.",
  "authors": [
    "Kristalina Georgieva"
  ],
  "publishDate": "2020-04-09",
  "sections": [
    {
      "heading": "Introduction: A Crisis Like No Other",
      "content": "- COVID-19 has disrupted social and economic order at lightning speed and on a scale not seen in living memory.\n- Lockdowns to fight the virus have affected billions of people and transformed normal activities (school, work, family) into risks.\n- Collective action is required—individuals, governments, businesses, community leaders, international organizations—to protect lives and livelihoods.\n- The IMF’s 189 member countries will focus on recovery in virtual Spring Meetings."
    },
    {
      "heading": "Where We Stand: the Status of the Global Economy",
      "content": "- Extraordinary uncertainty remains about the depth and duration of the crisis.\n- Global growth will turn sharply negative in 2020; the IMF anticipates the worst economic fallout since the Great Depression.\n- Three months prior, positive per capita income growth was expected in over 160 member countries in 2020; current projections show over 170 countries will experience negative per capita income growth this year.\n- The crisis affects advanced and developing economies alike; vulnerable people and countries are hit hardest.\n- Sectors taking a substantial hit include retail, hospitality, transport, and tourism.\n- Emerging markets and low-income nations face compounded risks:\n  - Weaker health systems and challenges of social distancing in densely populated and poverty-stricken areas.\n  - Exposure to demand and supply shocks, drastic tightening in financial conditions, and potential unsustainable debt burdens.\n  - Massive external pressures: portfolio outflows from emerging markets were about $100 billion in the last two months—more than three times larger than for the same period of the global financial crisis.\n  - Commodity exporters face a double blow from collapsing commodity prices.\n  - Remittances are expected to dwindle.\n- Financing needs and gaps:\n  - Gross external financing needs for emerging market and developing countries are estimated to be in the trillions of dollars, with residual gaps in the hundreds of billions of dollars.\n  - These countries can cover only a portion of needs on their own and urgently need external help.\n- Policy responses to date:\n  - Fiscal Monitor next week will show fiscal actions amounting to about $8 trillion worldwide.\n  - Massive monetary measures have been taken by the G20 and others.\n  - Many poorer nations are taking bold fiscal and monetary action despite far less firepower."
    },
    {
      "heading": "What Needs to Be Done: A 4-Point Plan",
      "content": "- First: Prioritize health and containment\n  - Continue essential containment measures and support health systems.\n  - Prioritize spending on testing, medical equipment, pay for doctors and nurses; ensure hospitals and makeshift clinics can function.\n  - Reallocate limited public resources where necessary in emerging and developing countries.\n  - Increase flows of resources to these countries and minimize disruptions to supply chains.\n  - Immediately refrain from export controls on medical supplies and food.\n- Second: Shield people and firms with timely fiscal and financial measures\n  - Use large, timely, targeted measures according to country circumstances: tax deferrals, wage subsidies, cash transfers to the most vulnerable, extended unemployment insurance and social assistance, temporary adjustments to credit guarantees and loan terms.\n  - Prevent liquidity pressures from becoming solvency problems and avoid scarring of the economy.\n- Third: Reduce financial system stress and avoid contagion\n  - Analyze vulnerabilities in the financial sector (Global Financial Stability Report).\n  - Rely on monetary stimulus and liquidity facilities; interest rates have been lowered in many countries.\n  - Major central banks have activated and created swap lines to reduce market stress.\n  - Enhance liquidity for a broader range of emerging economies to provide relief and lift confidence.\n- Fourth: Plan for recovery while in the containment phase\n  - Minimize scarring through policy action now and plan careful easing of restrictions based on clear evidence the epidemic is retreating.\n  - As stabilization measures take hold and business normalizes, move swiftly to boost demand with coordinated fiscal stimulus.\n  - Where inflation remains low and well-anchored, monetary policy should remain accommodative.\n  - Those with greater resources and policy space should do more; those with limited resources will need more external support."
    },
    {
      "heading": "The IMF: All Hands on Deck",
      "content": "- The IMF is working 24/7 to support members with policy advice, technical assistance, and financial resources.\n- Key capacities and actions:\n  - We have $1 trillion in lending capacity and are placing it at the service of our membership.\n  - Responding to an unprecedented number of calls for emergency financing—from over 90 countries so far.\n  - The Executive Board has agreed to double access to emergency facilities, allowing the IMF to meet the expected demand of about $100 billion in financing.\n  - Lending programs approved at record speed for the Kyrgyz Republic, Rwanda, Madagascar, and Togo, with many more to come.\n  - Reviewing the tool kit to better use precautionary credit lines, establish a short-term liquidity line, and help meet countries’ financing needs via other options—including the use of SDRs.\n  - Where a country’s debt is unsustainable and the IMF cannot lend, the IMF will look for solutions that can unlock critical financing.\n  - Revamped the Catastrophe Containment and Relief Trust (CCRT) to provide immediate debt relief to low-income countries affected by the crisis, creating space for urgent health spending rather than debt repayment.\n  - Working with donors to increase the CCRT to $1.4 billion to extend the duration of debt relief.\n  - Together with the World Bank, calling for a standstill of debt service to official bilateral creditors for the world’s poorest countries."
    },
    {
      "heading": "Conclusion: A Test of Our Humanity",
      "content": "- The crisis brings into relief solidarity, courage, creativity, and compassion.\n- The common threat calls for global cooperation to harness humanity’s strengths and emerge more resilient.\n- The actions taken now will determine the speed and strength of recovery.\n\nConfronting the Crisis: Priorities for the Global Economy — By Kristalina Georgieva, April 9, 2020\n\n---\n\n\n References\n\n- Speakers: Kristalina Georgieva, Managing Director, IMF; Tom Keene, Surveillance Anchor, Bloomberg\n- https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva\n- Kyrgyz Republic and the IMF\n- Speeches\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2020/04/07/sp040920-sms2020-curtain-raiser"
    }
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    "Authors: Kristalina Georgieva",
    "Published: April 9, 2020",
    "COVID-19 has disrupted social and economic order at lightning speed and on a scale not seen in living memory.",
    "Lockdowns to fight the virus have affected billions of people and transformed normal activities (school, work, family) into risks.",
    "Collective action is required—individuals, governments, businesses, community leaders, international organizations—to protect lives and livelihoods.",
    "The IMF’s 189 member countries will focus on recovery in virtual Spring Meetings.",
    "Extraordinary uncertainty remains about the depth and duration of the crisis.",
    "Global growth will turn sharply negative in 2020; the IMF anticipates the worst economic fallout since the Great Depression.",
    "Three months prior, positive per capita income growth was expected in over 160 member countries in 2020; current projections show over 170 countries will experience negative per capita income growth this year.",
    "The crisis affects advanced and developing economies alike; vulnerable people and countries are hit hardest.",
    "Sectors taking a substantial hit include retail, hospitality, transport, and tourism.",
    "Emerging markets and low-income nations face compounded risks:",
    "Financing needs and gaps:",
    "Policy responses to date:",
    "First: Prioritize health and containment",
    "Second: Shield people and firms with timely fiscal and financial measures",
    "Third: Reduce financial system stress and avoid contagion",
    "Fourth: Plan for recovery while in the containment phase",
    "The IMF is working 24/7 to support members with policy advice, technical assistance, and financial resources.",
    "Key capacities and actions:",
    "The crisis brings into relief solidarity, courage, creativity, and compassion.",
    "The common threat calls for global cooperation to harness humanity’s strengths and emerge more resilient.",
    "The actions taken now will determine the speed and strength of recovery.",
    "[Speakers: Kristalina Georgieva, Managing Director, IMF; Tom Keene, Surveillance Anchor, Bloomberg](https://www.imf.org/en/videos/view/6148387863001)",
    "[https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva](https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva)",
    "[Kyrgyz Republic and the IMF](http://www.imf.org/external/country/KGZ/index.htm)",
    "[Speeches](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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