The Chief Executive Officer of the International Monetary Fund (IMF), Kristalina Georgieva on Friday disclosed that the coronavirus pandemic has finally driven the global economy into a recession as predicted by experts.
According to her, the pestilence has caused a global economic downturn that will require massive funding to buoy developing nations that lack the capacity to deal with a disease that has monumental health and economic consequences.
In an online briefing, she said: “It is clear that we have entered a recession”, that will be worse than in 2009 following the global financial crisis.
With economies of the world forced to lockdown, Georgieva said; “the fund’s estimate for the overall financial needs of emerging markets is $2.5 trillion. We believe this is on the lower end.”
Current global statistics show that well over 80 countries already have appealed for emergency aid from the IMF to regain their balance. Many are also activating internal mechanisms to cushion the scathing economic effects of COVID-19.
The Central Bank of Nigeria and the bankers’ committee agreed last week to back a NGN3.5 trillion stimulus package for the Nigerian economy. The apex bank recently disclosed that it would support critical sectors of the economy with N1.1 trillion intervention fund.
While about N1 trillion will be used to support the local manufacturing sector as well as boost import substitution, the balance of N100 billion will be specifically used to support the health sector to ensure laboratories, researchers and innovators work with global scientists to patent and produce vaccines and test kits in Nigeria.
The United States Senate has also passed a bipartisan $2.2 trillion emergency relief package by a vote of 96-0, as the coronavirus pandemic scorches the world economy, marking the biggest rescue deal of its kind in US history.
The Bank of England decided to cut interest rate to 0.1%, the lowest level since it was set up in 1694. This is in addition to GBP 330 billion package to support small businesses, underwriting up to 80% of salary of small businesses like restaurants, pubs that will be directly impacted by the lockdown.
India approved economic stimulus package worth 1.7trillion Rupees (USD22.5billion), to be disbursed through food security measures for poor households and direct cash transfers. Wage earners, small business owners and low-income households are the most vulnerable during the three weeks lockdown in India. Both US Federal Reserve Bank and Reserve Bank of India cut rates as an immediate step towards improving liquidity and supporting growth and hence, minimize the impact of coronavirus on their economies.
Saudi Arabia unveiled stimulus measures amounting to 120 Saudi billion riyals (USD32 billion) to support their economy hit by the double blow of the coronavirus crisis and dramatically lower oil prices, just like Nigeria’s.
The sum includes 50 billion riyal (USD13.3 billion) package to support small and medium-sized businesses and 70 billion riyals to aid businesses, including the postponement and exemption of various government taxes.
The United Arab Emirates boosted the size of its stimulus package to USD34 billion as the second-biggest Arab economy seeks to fend off the impact of coronavirus. This came after semi autonomous Dubai and Abu Dhabi governments unveiled several stimulus packages. The Dubai Government announced an AED 1.5 billion ( USD41 billion) economic stimulus package to enhance liquidity and cushion the potential impact of the current global economic situation caused by the onset of the COVID-19.