IMF wants substantial stimulus to tide over Corona
Gita Gopinath, the chief economist at the International Monetary Fund, has opined that governments across the world should deploy “substantial” stimulus and international coordination to counteract the economic impact of the spreading coronavirus epidemic. “Policymakers will need to implement substantial targeted fiscal, monetary and financial market measures to help affected households and businesses,” she stated.
This comes at a time when the organization has already cautioned that the impact of the COVID-19 outbreak will slow growth in the world economy to below the 2.9% recorded last year. Besides infecting more than 110,000 people worldwide, the contagion has caused factories to remain shut, disrupted travel, and delayed conferences and sporting events.
In order to tackle the situation, some countries have already started taken measures. For example, The US Federal Reserve last week announced an emergency interest rate cut, and on Monday significantly increased its daily cash injections into money markets to $150 billion to ensure ample liquidity amid the virus uncertainty. Similarly, Italy has extended tax deadlines, and Korea has introduced wage subsidies.