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Crisis to have worse impact than expected: IMF

The International Monetary Fund said in a webcast Thursday hosted by the Council on Foreign Relations that the world can expect more waves of financial-market turbulence. It has also warned that the global economic outlook has worsened since its latest forecast three weeks ago. Presuming that the pandemic fades in the second half of 2020, the bank had said in the World Economic Outlook report on April 14 that  global gross domestic product will decline 3% this year.

IMF also expects that since the pandemic has not found an antidote yet, things can get worse and the developing nations’ external financing needs probably will be far above the US$2.5 trillion that the IMF has previously projected. “We know this crisis isn’t going away anytime soon,” IMF’s Chief Economist Gita Gopinath said.

Kenneth Rogoff, a professor at Harvard University professor, even expects that some countries will face a solvency crisis and will need debt write-downs rather than just postponement of payments.