Coronavirus COVID-19 wipes $50 billion off global exports in February alone, UN says
As UN economists announced a likely $50 billion drop in worldwide manufacturing exports in February alone, IMF pledged support for vulnerable nations.
In remarks made at a joint press conference with the head of the World Bank Group, the IMF Managing Director, Kristalina Georgieva, said that the UN-backed global funds would make up the shortfall, in effect, by offering to inject around $50 billion into low-income and emerging market nations, pending requests for support.
"Thanks to the generosity of our shareholders, we have about $1 trillion in overall lending capacity", she said. "For low-income countries, we have rapid-disbursing emergency financing of up to $10 billion that can be accessed without a full-fledged IMF programme."
The slowdown of manufacturing in China due to the COVID19 outbreak is disrupting world trade and could result in a $50 billion decrease in exports across global value chains, according to new UNCTAD estimates.
"Any manufacturing slowdown in one part of the world has a ripple effect in economic activity globally because of regional & global value chains."
The IMF chief added that members could access emergency financing through the Rapid Financing Instrument. "This facility could provide about $40 billion for emerging markets that could potentially approach us for financial support. We also have the Catastrophe Containment and Relief Trust – the CCRT – which provides eligible countries with up-front grants for relief on IMF debt service falling due.
"The CCRT proved to be effective during the 2014 Ebola outbreak, but is now underfunded with just over $200 million available against possible needs of over $1 billion." She called on member countries "to help ensure that this facility is fully re-charged and ready for the current crisis", and said that the Fund was "fully committed to supporting our member countries, particularly the most vulnerable. We have the tools to help and we are coordinating closely with our partner institutions."
IMF, World Bank, "stand ready to help"
Meanwhile, the International Monetary Fund (IMF) and the World Bank Group issued a joint message of solidarity in relation to the ongoing epidemic.
"The IMF and the World Bank Group stand ready to help our member countries address the human tragedy and economic challenge posed by the COVID-19 virus," they said in a statement.
We are engaged actively with international institutions and country authorities, with special attention to poor countries where health systems are the weakest and people are most vulnerable.
Available measures included emergency financing, policy advice and technical assistance, the institutions explained, underlining the need to help countries to invest in protecting themselves.
"The strengthening of country health surveillance and response systems is crucial to contain the spread of this and any future outbreaks," the statement said. (ILKHA)