NEW YORK: The International Monetary Fund has warned of the cumulative loss of the Corona crisis in the coming years, and expects the global economic losses due to the pandemic to reach $28 trillion over the next five years.
“The picture over the past few months has become less dangerous, yet we continue to expect the worst global recession since the Great Depression,” in the 1930s, International Monetary Fund director Kristalina Georgieva said.
Growth is expected to decline to minus 4.4 per cent this year, and over the next five years, the crisis could cost an estimated $28trn in losses in production,” she added.
The fund praised central banks around the world for the stimulus plans that cushioned the impact of the Covid-19 crisis on the global economy, and warned that the early cancellation of support packages could have disastrous repercussions on recovery efforts.
The fund manager called for dealing with global sovereign debt, which she expected in 2020 to reach a record level of 100pc of GDP.
She attributed this rise in sovereign debt to “the need for countries to increase spending to fight the Covid-19 crisis and secure a recovery.”