International Monetary Fund (IMF) President Kristalina Georgieva said global economic forecasts could be further reduced. Georgieva also warned the US and China not to ignite a trade war that could weaken the economic recovery in the coronavirus outbreak.
The IMF President, who attended an online event organized by the European University Institute, stated that the latest economic data is worse than the IMF’s already pessimistic 2020 shrinkage forecast of 3 percent.
“Unfortunately, because medical solutions do not appear in the near term, worse scenarios may occur for some economies. “The unknowns about the behavior of this virus darken the horizon for predictions.”
The IMF’s 3 percent contraction in the global economy is the worst drop since the Great Depression of the 1930s.
The IMF predicted that the economy would recover partially in 2021, but also warned that the outcomes could be much worse due to the outbreak.
The largest economy in the world, the US economy, has been hit hard by the restrictions on combating the epidemic.
According to official data, while unemployment rates rose to 14.7 percent last month, the White house said that this rate could reach 20 percent in May.
China – US trade war
US President Donald Trump threatened to impose new customs duties on what happened after China’s virus appeared.
Trump also said he could end the tier 1 trade deal with China.
High-level US and Chinese officials emphasize that they will continue the trade deal, while some observers say China’s commitment to buying American products lags far behind in its promise to purchase $ 77 billion more than the 2017 levels envisaged for the first year.
IMF President Georgieva warned that the return to protectionist economies could weaken economic recovery in a critical period.
Georgieva stated that the IMF provides emergency funds to 50 of 103 countries seeking help.
The IMF President stressed that although the number of dead in poor countries is lower than in rich countries, the sharp decline in money and raw material prices sent by employees outside the country put the poor countries at high risk.
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