The International Monetary Fund on Monday said its executive board had approved $1 billion in emergency funding for Ghana and $442 million for Senegal to enable both countries to respond to the rapidly-spreading coronavirus pandemic.
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Ghana was at high risk of debt distress, the IMF said in a statement. It said the large disbursement of emergency aid would help the West African countries address urgent fiscal and balance of payments needs, and catalyze support from other development partners.
It said it stood ready to provide further policy advice and further support to both countries as needed.
In the video below, the IMF’s report on the world economy:
KEY POINTS FROM THE REPORT:
- The International Monetary Fund expects the global economy to contract by 3% in 2020. The fund downgraded its growth forecast by 6.3 percentage points from its previous report as isolation, lockdowns and widespread closures to contain the virus hit the economy. By contrast, in January 2020 IMF had forecast a global GDP (gross domestic product) expansion of 3.3% for this year. The IMF, said the current crisis “….is a crisis like no other” and has called it “the Great Lockdown.”
- Gita Gopinath, the IMF’s chief economist, said: “It is very likely that this year the global economy will experience its worst recession since the Great Depression, surpassing that seen during the global financial crisis a decade ago”.
- IMF suggests that the U.S. economy will contract by 5.9% this year. In comparison, the eurozone is expected to shrink by 7.5%. The Chinese economy is projected to grow at a subdued 1.2% in 2020 and 9.2% in 2021.
- IMF also suggests that Italy’s GDP is set to contract by 9.1% while Spain’s GDP is set to contract by 8%. These two countries are the worst hit in Europe by COVID-19.
- The IMF projected that emerging markets and developing economies would shrink by 1% in 2020, this is a downward revision from 4.4% earlier this year. Growth among emerging markets and developing economies is projected to rebound to 6.6% in 2021.
- The Fund expects a “partial recovery” in 2021, but this is conditional on an improvement in the health crisis. In January 2020, the IMF had estimated 3.4% growth for global GDP in 2021; this has now been revised up to 5.8% (although growth is expected to be coming from a lower base following 2020′s projected contraction).
- There’s severe uncertainty about the duration and intensity of the economic shock, IMF also added that stimulating economic activity is more challenging given the required social distancing and isolation policies.
- The IMF said it had received “an unprecedented number of calls for emergency funding.” Out of its 189 members, more than 90 of them have asked for financial support. The IMF provides financing to members who are struggling economically, and it has $1 trillion in lending capacity.