Health and Science

Coronavirus pandemic economic fallout 'way worse than the global financial crisis,' IMF chief says

Key Points
  • The coronavirus pandemic has created an economic crisis "like no other,"  the top International Monetary Fund official said.
  • "Never in the history of the IMF have we witnessed the world economy come to a standstill," said  Kristalina Georgieva, managing director of the IMF.
  • "It is way worse than the global financial crisis" of 2008-09, Georgieva said during a World Health Organization news conference.
International Monetary Fund Managing Director Kristalina Georgieva speaks at a press conference in Washington D.C., on March 4, 2020.
Liu Jie | Xinhua | Getty Images

The coronavirus pandemic has created an economic crisis "like no other" — one that is "way worse" than the 2008 global financial crisis, the International Monetary Fund's top official said Friday.

"Never in the history of the IMF have we witnessed the world economy come to a standstill," Kristalina Georgieva, managing director of the IMF, said at a news conference.

Speaking at the World Health Organization's headquarters in Geneva, Georgieva said that this was "humanity's darkest hour, a big threat to the whole world and it requires from us to stand tall, be united and protect the most vulnerable of our citizens."

She said the IMF is working with the World Bank and other international financial institutions to alleviate the economic fallout from the outbreak, which has infected more than 1 million people in almost every country across the world, and killed more than 55,000 people.

Georgieva said the IMF is encouraging central banks in developed countries to support emerging markets and developing countries.

"Our main preoccupation in this crisis is to rapidly step up financing for countries, especially emerging markets, developing countries that are faced with very significant and growing needs," Georgieva said.

The IMF has a $1 trillion war chest, she said, adding "we are determined to use as much of it as necessary."

More than 90 countries so far have applied for assistance from those funds, she said.

"We have never seen ever such a growing demand for emergency financing," Georgieva said.

She urged countries that tap that financing to use it to pay doctors, nurses and other health-care workers as well as for other health-care needs.

At the same news conference, WHO Director-General Tedros Adhanom Ghebreyesus warned that countries which lift quarantine restrictions designed to contain the coronavirus too quickly risk seeing an "even more severe and prolonged" economic downturn.

"We are all aware of the profound social and economic consequences of the pandemic," Tedros said.

"Ultimately the best way for countries to end restrictions and ease their economic effects is to attack the virus," he said.

Georgieva said that developing economies have been hardest hit by the outbreak, and often have fewer resources to protect themselves from the economic fallout.

"We know that in many countries health systems are weak," she said.

Watch five experts weigh in on devastating March jobs report
Watch five experts weigh in on devastating March jobs report

Compounding the harm, she said, is "a flight to safety" by investors who are pulling their money out of vulnerable countries as the outbreak spreads.

Nearly $90 billion in investments have "flown out" of emerging economies during the outbreak, she said.

Georgieva noted that, "This is way more than during the global financial crisis, and some countries are highly dependent on commodities exports. With prices collapsing, they are hit yet again."

"The same way that the virus hits vulnerable people with medical preconditions hardest, the economic crisis hits vulnerable economies the hardest," she said.

At the end of the news conference, she said, "My closing message is we will get through this, but how fast and how effectively will depend a lot upon the actions we take."

Dr. Mike Ryan, executive director of the WHO's health emergencies program, said that world leaders need to build up their public health systems "if we're going to get out of an interminable cycle of economically punishing lockdowns and shutdowns."