IMF Forecasts World Economy Loses $15 Trillion until 2024 due to Coronavirus

Experts of the International Monetary Fund (IMF) indicate that the negative fallouts of the Coronavirus (known also as COVID-19)  led to losses that last during the period from through  2024 to hit $ 15 trillion.

On the other hand, Jeffrey Okamoto, First Deputy Managing Director of the IMF   confirmed that since March 2020, governments across the world have spent $16 trillion to provide financial support during the pandemic, and central banks globally have increased their balance sheets with a combined value of $7.5 trillion.

He explained that deficiency in economies of various countries hit the highest level since the Second World War (WWII).

He added the central banks offered liquidity more than what was offered in the last ten years.

He continued to say that the Fund research indicates that without the actions of policymakers, last year's recession, which was the worst peacetime recession since the Great Depression in the 20s of the 20th Century, would have tripled the level it has already reached.

"In the coming year, like vaccine production and numbers of immunized recipients increase, and as more economies reopen, policymakers should plan a fundamental shift from seeking to save their economies from collapse to strengthening these economies to weather future events through growth-focused reforms," ​​he said.

In view of inflation rising above forecasts and the uncertainty of when its drivers will recede, the pro-growth reforms targeting the supply side prevent any persistent inflationary risks arising from demand-side pressures in the United States and other countries.

For emerging market countries that have managed to maintain access to global capital markets, reforms can strengthen their economic fundamentals and boost investor confidence even as financial conditions tighten, especially if inflation persists in advanced economies.

For low-income countries that have exhausted the leeway of their policies, the payoff from growth-oriented reforms could be large enough to avoid severe fiscal austerity, allowing them to protect social and health spending in the short term while enhancing their ability to invest in human capital over the long term.

Okamoto predicted that this crisis will take years for most countries, but the main challenge for this generation of policymakers is to inspire the next generation to rebuild a brighter future.