International Monetary Fund Says Global Economy May Lose $28 Trillion in the Next Five Years to COVID-19

The International Monetary Fund (IMF) has said the world’s economy may lose as much as $28 trillion to COVID-19 in the next five years.

The Fund’s Managing Director, Kristalina Georgieva, disclosed this during her opening remarks at the annual general meeting conference held on Wednesday.

She said “The picture over the last few months has become less dire, yet we continue to project the worst global recession since the great depression.

“Growth is expected to fall to -4.4 per cent this year. And over the next five years, the crisis could cost an estimated $28tn in output losses.

“At the same time, we can see stars shining above us. We see unprecedented efforts in vaccine development and treatment.

“We see extraordinary and coordinated fiscal and monetary measures putting a floor under the world economy. And the world is starting to learn how to live with the virus.

“While there is tremendous uncertainty around our forecast, we project a partial and uneven recovery in 2021, with growth expected at 5.2 per cent.”

“As I said in my curtain raiser speech, all countries now face a “long ascent”—a journey that will be difficult, uneven, uncertain, and prone to setbacks.

“Think of how the virus is resurging in a number of countries.”

She also made recommendations, the managing director explained that an unusual crisis requires an unusual approach and solution.

Georgieva said, “In our Global Policy Agenda, which we are releasing today, we outline the measures we believe are needed to overcome the crisis and build a brighter future. Let me highlight three priorities:

“First—continue with essential measures to protect lives and livelihoods.

“A durable economic recovery is only possible if we beat the pandemic everywhere. Stepping up vital health measures is imperative.

“As is fiscal and monetary support to households and firms. These lifelines—such as credit guarantees and wage subsidies—are likely to remain critical for some time, to ensure economic and financial stability.

“Pull the plug too early, and you risk serious, self-inflicted harm.”