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As feared, the recession has begun to strangle the world. The global economy is now in a negative growth trajectory that appears to be far worse than the recession of 2008, thanks to the Covid-10 pandemic that has sent the planet reeling into a standstill mode.
The International Monetary Fund chief Kristalina Georgieva confirmed on Friday, March 27, that the global economy is now in a recession but said it is heartening to see world leaders finally realising that only a coordinated effort will be able to stem the spread of the novel coronavirus.
"We have stated that the world is now in recession and that the length and depth of this recession depend on two things: Containing the virus and having an effective, coordinated response to the crisis," she was quoted as saying by CNBC.
"I'm very encouraged by what I see now. I see much clearer understanding among global leaders that if we don't beat it everywhere we won't be able to get out of it," she added.
"We should not go ... with small measures now when we know that it is a gigantic crisis," she said minutes later. "We've never seen the world economy standing still. Now we do. How we go about revitalizing it is another important topic."
Just a few days ago, the IMF pledged $1 trillion in loans, while the World Bank and the International Finance Corporation (IFC) has pitched in $14 billion to help nations facing the pandemic assault.
Most of the economic powers had risen to the grim reality to come out with a host of stimulus measures totalling trillions of dollars.
The IMF had warned that pandemic would lead to a global recession that could be worse than the one triggered by the global financial crisis of 2008-2009, but world economic output should recover in 2021.
In a joint plea with the World Bank Group, the IMF called all bilateral creditors to suspend debt payments from International Development Association (IDA) countries to help fight Covid-19 pandemic.
The joint call to G-20 for urgent debt relief for the poorest countries came close of the heels of a grim warning by the IMF about an impending global recession triggered by Covid-19 pandemic.
IMF's warning came as across the world more and more nations have started intensifying efforts to contain the outbreak with partial or total lock downs.
On last Monday, Georgieva said a recovery was 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.
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