The world’s economy is now in a recession and projects a rebound in 2021, the IMF said on Friday.

Georgieva, the Managing Director of the International Monetary Fund (IMF), on Friday at a press briefing said, “It is now clear that we have entered a recession. We project a rebound in 2021, but only if we contain the virus and prevent liquidity problems from becoming a solvency issue”.

She explained that this was as a result of the coronavirus (COVID-19) pandemic that has killed thousands of people around the world.

According to her, “We have reassessed the prospect for growth for 2020 and 2021. It is now clear that we have entered a recession – as bad as or worse than in 2009,” Georgieva announced.

She added, “We do project recovery in 2021 – in fact, there may be a sizeable rebound, but only if we succeed with containing the virus – everywhere – and prevent liquidity problems from becoming a solvency issue.”

Georgieva noted that many countries have taken measures to prevent this by addressing the crisis in their health sector.

The IMF chief said that IMFC, the governing body of the organisation representing 189 member countries, met earlier to discuss the threat posed to the world by coronavirus.

According to her, a major concern about the effect of COVID-19 on the global economy is the risk of a wave of bankruptcies and layoffs capable of eroding the fabric of the societies.

A key concern about a long-lasting impact of the sudden stop of the world economy is the risk of a wave of bankruptcies and layoffs that not only can undermine the recovery but can erode the fabric of our societies.

Her statement reads in part:

Following yesterday’s G20 Leaders meeting, the IMFC took stock of the rapidly developing health crisis, its impact on the economy, measures taken to address these impacts, and how well the Fund is equipped to help its member countries.

I noted that since the IMFC last met just a few weeks ago:

We have reassessed the prospect for growth for 2020 and 2021. It is now clear that we have entered a recession – as bad as or worse than in 2009.

We do project recovery in 2021–in fact, there may be a sizeable rebound, but only if we succeed with containing the virus – everywhere – and prevent liquidity problems from becoming a solvency issue.

To avoid this happening, many countries have taken far-reaching measures to address the health crisis and to cushion its impact on the economy – both on the monetary and on the fiscal side.

The G20 yesterday reported fiscal measures totalling some 5 trillion dollars or over 6 % of global GDP. It is important for those ahead in taking action to share their experience with those still behind.

To support this, last night the IMF launched a policy actions tracker for 186 countries to help us all to see who is doing what.

We will be updating this information regularly and will provide country-specific analysis in line with our surveillance mandate.

We have seen an extraordinary spike in requests for IMF emergency financing – some 80 countries have placed requests and more are likely to come.