IMF says COVID-19 could lead to serious economic consequences in future

IMF says COVID-19 could lead to serious economic consequences in future

- The IMF has expressed fears over the impact of the coronavirus on countries all over the world

- Its report shows that some measures have been outlined by emerging market economies to deal with COVID-19

- The IMF added that inadequate policy space may compel some countries to resort to unorthodox measures

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The International Monetary Fund (IMF) is of the view that the outbreak of the coronavirus could hurt lives and have dire economic effects on countries all over the world.

It added that, despite measures implemented to deal with the pandemic, emerging market economies show signs of considerable uncertainty.

In its June World Economic Outlook update, the IMF revealed that a number of emerging market economies such as South Africa eased monetary policy.

IMF says COVID-19 could lead to serious economic consequences in future

Kristalina Georgieva, Managing Director of the IMF Source: dw.com
Source: UGC

READ ALSO: IMF sets $500 million at 0% interest rate to fight COVID-19

The IMF added that such economies have relaxed their financial stance as they hope to tackle the health crisis., support people and firms, and offset the economic shocks.

A report by 3news.com shows that such modest efforts have yielded significantly greater results than what was experienced during the global financial crisis.

According to the IMF, "confronting a more severe downturn will be challenging because most emerging markets entered the current crisis with limited room for traditional fiscal, monetary, and external policy support. And much policy room has already been used up by actions undertaken in recent months."

The IMF went on to say that a lack of policy space may compel some countries to adopt more unorthodox measures.

These include price controls, trade restrictions, as well as unconventional monetary policy and steps to ease credit and financial regulation.

In other news, the IMF has delayed the payment of debts of 25 countries by six months.

It has approved $500 million to serve as debt relief for the listed countries, 19 of which are from Africa. Those African countries are:

  • Benin
  • Burkina Faso
  • Central African Republic
  • Chad
  • Comoros
  • Congo
  • The Gambia
  • Guinea
  • Guinea-Bissau
  • Liberia
  • Madagascar
  • Malawi
  • Mali
  • Mozambique
  • Niger
  • Rwanda
  • São Tomé and Príncipe
  • Sierra Leone
  • Togo.

READ ALSO: IMF's board approves $1 billion package for Ghana to fight COVID-19

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Source: Yen

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