Kristalina Georgieva compares today with “roaring 1920s” and criticises UK wealth gapThe head of the International Monetary Fund has warned that the global economy risks a return of the Great Depression, driven by inequality and financial sector instability.Speaking at the Peterson Institute of International Economics in Washington, Kristalina Georgieva said new IMF research, which compares the current economy to the “roaring 1920s” that culminated in the great market crash of 1929, revealed that a similar trend was already under way. Continue reading...
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Monetary fund warns the US and China against continuing trade war, saying it could damage coronavirus...Monetary fund warns the US and China against continuing trade war, saying it could damage coronavirus recoveryCoronavirus – latest updatesSee all our coronavirus coverageThe head of the International Monetary Fund has signalled a possible downward revision of global economic forecasts, and warned the United States and China against rekindling a trade war that could weaken a recovery from the coronavirus pandemic.Kristalina Georgieva, the IMF’s managing director, told an online event hosted by the European University Institute that recent economic data for many countries was coming in below the fund’s already pessimistic forecast for a 3% contraction in 2020. Continue reading...
Asian economies will see their growth come to a halt this year amid the coronavirus pandemic, IMF warns
The IMF warned on Wednesday that Asian economies will see no growth in 2020 China is...The IMF warned on Wednesday that Asian economies will see no growth in 2020 China is the only country expected to grow at 1.2% in 2020 The predictions put Asia-Pacific to grow by the lowest amount since the 1960s Asia will face no economic growth in 2020 and face its worst growth performance in almost 60 years, the International Monetary Fund (IMF) warned on Wednesday. Chang Yong Rhee, director of the IMF's Asia and Pacific department wrote in a blogpost on Thursday: "This is a crisis like no other. It is worse than the Global Financial Crisis, and Asia is not immune." If the predictions come true this will put the region at worse growth than levels seen during both the global Financial Crisis of 2008 and the Asian Financial Crisis. The Asian Financial Crisis began in 1997 when Thailand decided to no longer peg its currency to the US dollar. Currency declines and economic upheaval rippled across much of East Asia. International stocks fell as much as 60%, prompting interventions from the IMF and the World Bank. The impact of the crisis was also felt in nations such as the US, Russia and Europe. Rhee added: "While there is huge uncertainty about 2020 growth prospects, and even more so about the 2021 outlook, the impact of the coronavirus on the region will—across the board—be severe and unprecedented." The predictions affirms the economic fallout that is occurring as a result of the novelty coronavirus pandemic. At the time of writing, coronavirus- which causes a disease called COVID-19- has infected more than 2 million people and killed more than 137,000 people. The research will be a blow to many economies who were hoping to recover as countries begin to ease lockdowns. Double slowdown The research also predicts the global economy will shrink by 3% in 2020. Growth in the US is expected to fall by 6%, while Europe's economy is expecting to contract by 6.6%. But China's economy will likely grow in 2020, but by just 1.2%, compared to 6.1% in 2019. Even during the Global Financial Crisis, China was able to record 9.4% growth. The IMF has previously warned that the global economy is going to face a severe recession that is worse since the Great Depression of the 1930s. The IMF called for a comprehensive and coordinated policy response. "The first priority is to support and protect the health sector to contain the virus and introduce measures that slow contagion. If there is not enough space within countries' budgets, they will need to re-prioritize other spending," Rhee said. Monetary policies should be used to provide ample liquidity, ease financial stress of industries and to reduce macroprudential regulations. Central banks across Asia have engaged in various monetary policy efforts, including buying government bonds to prevent their economies from collapsing during the ongoing covid crisis. But the IMF warned that this may not be enough with central banks soon having to use their balance sheets more "flexibly" and aggressively support "small and medium-sized enterprises through risk-sharing with the government". Join the conversation about this story » NOW WATCH: Why thoroughbred horse semen is the world's most expensive liquid
Latest World Economic Outlook describes shock of coronavirus pandemic as ‘like no other’Coronavirus – latest updatesSee...Latest World Economic Outlook describes shock of coronavirus pandemic as ‘like no other’Coronavirus – latest updatesSee all our coronavirus coverageThe International Monetary Fund has slashed its forecasts for global growth in response to the Covid-19 pandemic and warned of a slump in output this year unparalleled since the Great Depression of the 1930s.In its half-yearly forecasts, the IMF said the “Great Lockdown” would cause a dramatic drop in activity that would be far more painful than the recession that followed the banking meltdown of the late 2000s. Continue reading...