Coronavirus: the crisis has entered a new phase but the world “is not out of the woods”

The crisis caused by the pandemic has entered a new phase that will require flexibility to ensure " a sustainable and equitable recovery ", said Thursday the IMF Managing Director, warning that the world " is not yet out of the woods" " Speaking in a blog a few days before a virtual meeting of the G20, chaired by Saudi Arabia, Kristalina Georgieva warns of any excessive optimism: if certain positive signs emerge, "we are not out of the woods yet. A second global wave of the disease could lead to further disruption in economic activity. Other risks include distorted asset values, volatile commodity prices, rising protectionism and political instability , ”she said.

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She also qualifies her remarks by pointing out “ decisive advances in research on vaccines and treatments (which) could boost confidence and economic activity ”. The economist recognizes, however, that " these alternative scenarios underline how exceptionally high the uncertainty remains ".

The boss of the institution also sets out her priorities: maintain, " even extend ", social protection measures, continue to spend public money to stimulate the economy and take advantage of this " opportunity that only arises once by century "to rebuild a world" fairer, greener, more sustainable, more intelligent and above all more resilient ".

The big financiers of the G20 are meeting in a difficult context, the pandemic continuing to progress, according to the WHO. This " crisis like no other " is much more severe than expected and the recovery will be slower than expected, warned the Fund on June 24, by publishing the revision of its global economic forecasts. For 2020, the IMF predicts a global recession of 4.9%. This is much worse than the 3% expected in April, in the heart of the pandemic, when the Fund already stressed that it was the worst crisis since the Great Depression of the 1930s.

And for certain countries, particularly in Europe, the contraction in gross domestic product is staggering: -12.5% ​​for France, -12.8% for Spain and Italy. In the United States, GDP is expected to collapse by 8% this year, well beyond the 5.9% decline estimated in April. For China, where the deadly virus started in late 2019, the Fund expects 1% growth, far from the 6.1% achieved last year. In 2021, world GDP is expected to rebound by 5.4% if the IMF scenario is realized.