According to the IMF, the coronavirus has already driven the global economy into recession. The IMF has advised countries to 'spend big' to avoid bankruptcies and debt defaults. "It is now clear that we have entered a recession as bad or worse than in 2009," Georgieva stated in a press conference, adding later that it will be 'quite deep. IMF Managing Director Kristalina Georgieva said, “ Emerging market countries will need at least $2.5 trillion in financial resources to get through the crisis, and their own internal reserves and market borrowing capacity will fall short of meeting this need.”
The IMF Director warns the world of the severity of the recession. She says the worst is yet to come from the emerging markets. Emerging markets that are yet to battle the Coronavirus are facing another set of problems. With leading economies such as the US and Europe fighting the Coronavirus, the emerging economies are facing capital outflows, reduced demand for their exports and a steep drop in commodity prices. Georgieva has stated that 81 countries have consulted the IMF about emergency financing.
IMF is focusing on creating a new short-term liquidity facility. The IMF has taken the opinion of member countries in this case. Georgieva told Reuters that the IMF member countries had encouraged the Fund to focus its efforts on steps that could be done quickly. In response to their advice, the IMF has doubled the emergency financing to $100 billion.
The G20 countries have pledged a $5 trillion monetary injection. When a question on whether the global economy needs more than $5 trillion, she replied, “ Our advice is to go big.” She also added, "This is a very big crisis and it's not going to be sorted out without a very massive deployment of resources.” The G2’s 5$ trillion pledge is close to what was spent to counteract the 2008 financial crisis in 2009. However, economists have said that this crisis could be far worse as it involves larger portions of the world.
The IMF has been working on other measures too. The IMF executive board has approved changes that give the fund more freedom. The changes will allow the fund to provide up to two years of debt service relief to its poorest and most vulnerable members whilst they fight the COVID-19 crisis. The IMF has made available $14 billion for immediate coronavirus health care needs. The Fund is also considering a $2 billion financing project to help 25 countries tackle coronavirus. The fund has welcomed the $2.2 trillion aid package signed into law by American President Donald Trump.