IMF Chief Kristalina Georgieva: The Coronavirus may Damage Global Growth
She said the full impact of the spreading disease that has already killed more than 1,600 people would depend on how quickly it was contained.
“I advise everybody not to jump to premature conclusions. There is still a great deal of uncertainty. We operate with scenarios, not yet with projections, ask me in 10 days,” Georgieva said.
According to the head of the Fund, it is still too early to assess the full effects of the epidemic, although she acknowledges that some sectors such as transport and tourism are already heavily affected. In its updated assessment of the outlook for the global economy in January, the IMF lowered its forecast for global growth in 2020 by 0.1 percentage points to 3.3 percent. For 2019, growth was estimated at 2.9 percent, the slowest pace in a decade.
Georgieva pointed out that if the disease is managed quickly, a sharp decline and very rapid recovery can be observed.
She noted that, given the epidemic caused by the similar strain of Severe Acute Respiratory Syndrome (SARS) in 2002, it should be borne in mind that the then share of the Chinese economy in the world was only 8 percent, and is now 19 percent.
According to her, the trade agreement between the US and China, which is the world's first and second largest economies, has reduced the effects of the disease on the global economy. The world must fear the rapid growth that results from uncertainty, she warned.
She said that the world should be concerned “about sluggish growth” impacted by uncertainty, said the IMF chief.
“We are now stuck with low productivity growth, low economic growth, low interest rates and low inflation,” she told the Dubai forum, also attended by US President Donald Trump’s daughter Ivanka and former British prime minister Theresa May.
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