Daily Management Review

2020 Growth Will Be Lower Than 2019 Due To Coronavirus, Warns IMF


2020 Growth Will Be Lower Than 2019 Due To Coronavirus, Warns IMF
The International Monetary Fund has warned that the global economic growth for 2020 will fall below the growth rate that was reached last year because of the fast and wide spread of the deadly coronavirus. The IMF also announced an aid of $50bn in emergency funding for those middle and low income countries that have been hit by the virus outbreak.
The coronavirus epidemic, which has spread to 70 of the 189 member countries of the international financial body, would bring down the expected increase in global growth for the current year, warned the fund’s managing director, Kristalina Georgieva.
About $40bn of the aid amount announced by the IMF will be given in the form of short-term crisis funding to developing countries while the rest will be available as zero interest loans to the countries to prop up their health systems to tackle the threat of the spread of the coronavirus.
Business supply chains globally were being found to be hit by the coronavirus – which is officially known as Covid-19, based on the Fund’s observations of the development of the global outbreak over the last week, Georgieva said, and added that these developments were likely to significantly impact the economies of developing countries – a large number of which are not adequately capable to handle the new epidemic.
Measures to tackle the spread of virus are being taken by more increasing number of companies across Europe and the United States.
Tesco, the largest retailer of the United Kingdom, has advised more than 5,000 of its employees who are office-based to get ready to work from home. Employees at the Welwyn Garden City headquarters of the company as well as its other offices were directed to gather everything that they needed to work from home. That would include their laptops and work mobile phones, said reports.
“Emergency trading protocols” would be put in place that would allow 1,000 staff, along with thousands of brokers and underwriters, to start to work from home,, said Lloyd’s of London, the world’s biggest insurance market.
Om case there is a worsening of the outbreak, there are chances of a recession in France and Italy, EU finance ministers have been warned, according to a report published by Bloomberg. Such recession could result in a “vicious” spiral of lowering of demands and growth in many other related markets, expects the finance ministers.
In order to tackle the impact on its economy because of the coronavirus outbreak, a package of  €3.6bn was announced by the Italian government earlier this week And it has been reported that the government is also considering a slew of other steps aimed at restricting the outbreak and preventing a possible recession.
The efforts to bring migrants workers and other employees to work in China have been slow, Georgieva said. Currently the manufacturing units in China are functioning at only 60 per cent capacity, she said, even though factories aim to ramp up production to about 90 per cent of capacity by the next fortnight.