As stated by the Director of the International monetary Fund Kristalina Georgieva, the organization lowered the growth forecast for China’s economy by 0.4% compared with the January estimate and 5.6% on the background of “wide geographical spread” of the epidemic of coronavirus in the world.
Previous estimates were based on assumptions that the epidemic is limited to the territory of China and will not spread to other countries. However, the hopes of economists is not justified. The head of the IMF does not rule out more negative scenarios.
“We are considering the worst-case scenario … in which the impact on the growth for China will be more significant,” said Georgieva at a joint press conference of the IMF and world Bank — “the Chinese authorities themselves admit that this year growth will be lower”. The head of the Fund expressed regret regarding the fact that the baseline scenario is, apparently, not implemented.
meanwhile, Chinese authorities, as reported by the South China Morning Post has assured the IMF that the enterprises of China have already resumed 60% of the capacity. Beijing encourages manufacturers to gradually restore production. It is expected that in the next few weeks it will be restored to 90%.
However, the IMF is not prone to optimistic estimates, pointing to the global spread of the epidemic. According to Georgieva, it is a threat to global growth.
Kristalina Georgieva said that in the current situation too large uncertainty to predict the real impact of the epidemic difficult. However, she noted that much will depend on the “timeliness and effectiveness of our actions”.
on the Basis of similar previous crises, according to the head of the IMF, “about a third of the economic losses from the disease would be direct losses from death of people, closure of workplaces and quarantine”. “The remaining two-thirds are indirect losses, which will reflect a reduction of the consumer market, and I think the situation on the financial markets,” added Georgieva.
on the Eve of the managing Director of the Fund said that the IMF will allocate to combat coronavirus $50 billion to low-income and emerging markets. The money should go to support health systems and the leveling of the economic consequences of the epidemic. The world Bank has also stated its readiness to provide assistance to developing countries in total $12 billion.