Kristalina Georgieva, IMF’s managing director, declared that more than 100 countries asked for financial aid.
At the recent G20 meeting, Georgieva said that due to the pandemic, half the globe asked for emergency assistance. At that time, ten countries received the aid, and half of the remaining ones will get it by the end of April. She understands the gravity of the matter, and the IMF will provide the needed help very quickly.
So, to supply the financial demand, the Executive Board approved a Short-term Liquidity Line (SLL). The SLL consist of “$1 trillion firepower,” and has an expected lifespan of 7 years. The Board will further decide in 2025 if the facility will be extended or not.
Moreover, the International Monetary Fund expects a contraction of the global economy of 3% for this year, after it predicted in January an expansion of 3.3%. Also, the world could face a “1930s recession”.
For 2021, Georgieva declared that the global economy can see an improvement and an expansion of 5.8% but only if the virus is contained and the number of new cases decreases.
IMF is one step behind some national governments. A handful of the biggest economies in the world already took the matter into their hands and injected money. Combined, more than $8 trillion has been dispatched to fight the effects of the pandemic.
For example, Germany and Italy, each adopted stimuli worth 30% of their GDP. In total, more than $1.84 trillion is directed to bank guarantees, loans, and equities injections. France pledged more than $300 billion, while Spain allocated $100 billion.
The United States alone voted and approved an initial stimulus package of $2.3 trillion, which has been supplemented afterwards with several other installments.
If in Europe and the USA things are somehow balanced, in Africa the only country hat took steps in this direction is South Africa who approved $26 billion in stimulus.
China, the place where it all started, is thoughtful with its money, and only 3% of the GDP ($424 billion) consists of fiscal measures.
The IMF economists expect the gap between the poor and the rich countries in the world to be even more significant not only now, but also when the economy will get back on its feet.
See the difference when investing with Capex by accessing elite features:
- Stellar custom service
- Powerful WebTrader platform and mobile app
- High-end integrated trading tools
- Full license and regulation from top regulators
Sources: cnbc.com, linkedin.com, imf.org, bnnbloomberg.ca
The information presented herein is prepared by CAPEX.com and does not intend to constitute Investment Advice. The information herein is provided as a general marketing communication for information purposes only and as such it has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. Users/readers should not rely solely on the information presented herewith and should do their own research/analysis by also reading the actual underlying research. The content herewith is generic and does not take into consideration individual personal circumstances, investment experience or current financial situation. Therefore, Key Way Investments Ltd shall not accept any responsibility for any losses of traders due to the use and the content of the information presented herein. Past performance is not a reliable indicator of future results.
Users/readers should not rely solely on the information presented herewith and should do their own research/analysis by also reading the actual underlying research. The content herewith is generic and does not take into consideration individual personal circumstances, investment experience or current financial situation.
Therefore, Key Way Investments Ltd shall not accept any responsibility for any losses of traders due to the use and the content of the information presented herein. Past performance and forecasts are not reliable indicators of future results.