International Monetary Fund head says global economy now in recession

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Countries should use everything in their policy arsenal to combat the outbreak, the managing director said, as "small measures" can't solve "a huge crisis".

In a statement issued on Thursday, the International Monetary Fund managing director said that the authorities in Pakistan have continued their reform efforts to address Pakistan's economic challenges, but progress is being threatened by the devastating effects of the COVID-19 outbreak and the deterioration in global economic and financial conditions.

The coronavirus pandemic has driven the global economy into a crash that will require massive funding to help developing nations, International Monetary Fund chief Kristalina Georgieva warned on Friday.

The International Monetary Fund said Friday that the global economy has fallen into a recession, with economic and social activities increasingly curtailed in many countries in an effort to contain the spread of the coronavirus pandemic.

According to Georgieva, the 2020 recession and its implications are likely to be worse than the consequences of the global financial crisis of 2008.

She said she planned to discuss these issues with the IMF's executive board with the goal of putting together a package of reforms that could be presented at the IMF's spring meetings in mid-April.

"We've never seen the world economy standing still".

Many of these emerging markets will experience a contraction as necessary containment measures take their toll, and are shocked by reduced global demand for their exports - tourism, commodities, and manufactured goods - that provide critical streams of foreign exchange.

The economic slowdown taking place around the world warrants the most potent policy response, Georgieva said Friday. Similarly, the State Bank of Pakistan has adopted a timely set of measures, including a lowering of the policy rate, new refinancing facilities to support the flow of credit, and temporary regulatory relief measures.

The greatest health impact so far, the group noted, has been in advanced economies. Georgieva said in response to a question.

"We are in an unprecedented situation where a global health pandemic has turned into an economic and financial crisis", she said. Governments should avoid "small measures now when we know that it is a very big crisis", she told CNBC. "We also want to think about what is going to follow the recovery and make sure that we are putting forward measures that can be supportive in this regard", she said.



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