IMF Managing Director Discusses Future of Global Economy

KRISTALINA GEORGIEVA, MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND: Well, this is really a crisis like no other. First, because it is a combination of pandemic and economic crisis in which to fight the pandemic, we have to stop the economy. And at the time when you need more revenues for your health systems and to help workers and firms, you actually have less. And that leads to very massive action to keep the economy virtually on life support. Fiscal action, monetary policy action. Very, very unusual. Never happened before. But let me tell you two more things there, Christiane. It is a truly global crisis. We haven’t had a global crisis when the whole world is affected at the same time and goes backwards. And on top of it, uncertainty is not your usual economic uncertainty of how demand and supply would interact. It is uncertainty about a novel virus. We don’t know what it will do. Epidemiologists don’t know what it would do. And that added uncertainty makes it all so very complicated.

CHRISTIANE AMANPOUR: And what we have learned, even for sort of, you know, nonexperts like myself, ordinary people looking at the economy, it’s sort of like a religious thing to say the economy hates uncertainty. So, so you have just stated that that’s what we’re living in right now, uncertainty. But also, just to put it in perspective, you know, not so many months ago you were predicted economic growth saying that, I think, something like 160 countries would, this year, show per capita income growth. Now, you’re saying the opposite for 170 countries, their economies are going to contract and about 100 have already asked you, the IMF, for help. I believe you have about a trillion dollars at your disposal for help. It sounds like a lot. Is it for that much need all at once?

GEORGIEVA: What is needed now is to provide financial support to the countries that cannot, on their own, cope with this crisis and do it very rapidly. At the IMF, we have taken early the decision to double emergency financing, meaning that this lifeline can last longer and the countries certainly need it. But on top of it, we are looking into who is going to be affected most dramatically? The same way the virus hits people with weak immune system the hardest, the economic crisis hits poorest countries the hardest.