The COVID-19 pandemic would cause a global recession in 2020 that could be worse than the one triggered by the 2008-2009 global financial crisis, but world economic output should recover in 2021, the IMF said on Monday.
IMF managing director Kristalina Georgieva welcomed extraordinary fiscal actions already taken by many countries to boost health systems, and protect affected companies and workers, and steps taken by central banks to ease monetary policy.
“Even more will be needed, especially on the fiscal front,” she said.
Georgieva issued the new outlook after a conference call of G20 finance ministers and central bankers, who she said agreed on the need for solidarity across the globe.
“The human costs of the coronavirus pandemic are already immeasurable, and all countries need to work together to protect people and limit the economic damage,” Georgieva said.
More countries are imposing lockdown measures to contain the rapidly spreading coronavirus.
The outlook for global growth is negative and the IMF expects “a recession at least as bad as during the global financial crisis, or worse,” Georgieva said.
Earlier this month, Georgieva had warned that 2020 world growth would be below last year’s 2.9 percent rate, but stopped short of predicting a recession.
Georgieva on Monday said that a recovery is expected in 2021, but to reach it, countries would need to prioritize containment and strengthen health systems.
“The economic impact is and will be severe, but the faster the virus stops, the quicker and stronger the recovery will be,” she said.
The IMF plans to step up emergency finance, Georgieva said, adding that 80 countries have already requested help and that the IMF stands ready to deploy all of its US$1 trillion lending capacity.
Advanced economies are generally in better shape to deal with the crisis, but many emerging markets and low-income countries face significant challenges, including outward capital flows, Georgieva said, adding that investors have already removed US$83 billion from emerging markets since the start of the crisis, the largest capital outflow ever recorded.
The IMF is particularly concerned about low-income countries in debt distress and is working closely with them to address those concerns, she added.
The IMF called again on members to contribute funds to replenish its Catastrophe Containment and Relief Trust, established in February 2015, to help the poorest countries.
The IMF is exploring other options with its members, Georgieva said.
Several low and middle-income countries have asked for an allocation from the Special Drawing Right, an international reserve asset created by the IMF in 1969 to supplement its member countries’ official reserves, as was done during the global financial crisis, she said.
IMF members also need to provide additional swap lines with emerging market countries to address a global liquidity crunch, she said, adding that the IMF is exploring a proposal that would facilitate a broader network of swap lines, including through an IMF-swap-type facility.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, on Monday issued a statement about the balanced life environment it provides its employees, in response to a Fortune article at the weekend in which several former and current employees in the US were quoted complaining about the company’s “brutal” corporate culture. In the statement, TSMC said average work hours at the company have not exceeded 50 hours a week over the past two years with only a few exceptions, such as when the company introduces a new technology process or speeds up building a new plant. In such situations,
At a red-brick factory in the German port city of Hamburg, cocoa bean shells go in one end and out the other comes an amazing black powder with the potential to counter climate change. The substance, dubbed biochar, is produced by heating the cocoa husks in an oxygen-free room to 600°C. The process locks in greenhouse gases and the final product can be used as a fertilizer, or as an ingredient in the production of “green” concrete. While the biochar industry is still in its infancy, the technology offers a novel way to remove carbon from the Earth’s atmosphere, experts have said. Biochar could
FALLING CHIP DEMAND: Moody’s Investors Service expects revenue at the contract chipmaker to fall by about 1 percent, adding that the firm’s earnings could also retreat Slower global economic growth and US export restrictions would dent revenue at Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) over the next 12 to 18 months, Moody’s Investors Service said in its latest report. “We expect revenue at TSMC to fall by 1 percent after its robust growth of around 40 percent in 2022,” it said, adding that earnings would also slip from a high comparison base. Nevertheless, strong net cash positions and good access to funding would enable the company to weather the short-term challenges, Moody’s said. Slowing global growth, coupled with high interest rates and inflation, is reducing chip demand, especially for
WEAK PROSPECTS: The contract electronics manufacturer expects revenue to drop this quarter due to product transitions and a high comparison base a year earlier Hon Hai Precision Industry Co (鴻海精密), a major iPhone assembler, yesterday posted a second straight monthly growth in revenue to NT$45.07 billion (US$1.47 billion) last month, thanks to a pickup in smartphone demand. Last month’s revenue marked its best performance since January. On an annual basis, sales dipped 9.45 percent, the smallest annual decline since February, compared with NT$49.78 billion in May last year. Revenue from smart consumer electronics products, primarily iPhones and smartphones for other brands, delivered a “strong” double-digit, month-on-month growth in May because of customers’ pull-in, Hon Hai said in a company statement. That was the only business category
RSS