The global spread of coronavirus has crushed hopes for stronger growth and will hold global output gains to their slowest pace since the 2008-2009 financial crisis, says the International Monetry Fund.
The IMF now expects 2020 world growth to be below the 2.9 per cent rate for 2019 and revised forecasts will be issued in the coming weeks, Managing Director Kristalina Georgieve said on Wednesday.
Trade wars pushed global growth last year to the lowest rate since a 0.7 per cent contraction in 2009.
The changed forecast would represent a more than 0.4-percentage-point drop from the 3.3 per cent growth the IMF had estimated for 2020 in January as US-China trade tensions eased.
“Global growth in 2020 will dip below last year’s levels but how far it will fall and how long the impact will be is still difficult to predict,” Georgieva said.
She declined to say whether the escalating health crisis could push the world into a recession.
The IMF is making available $US50 billion ($A75 billion) in emergency funding to help poor and middle-income countries with weak health systems respond to the epidemic, she said.
About $US10 billion of that can be accessed by the poorest countries at zero interest for up to 10 years, while many middle-income countries have access to about $US40 billion at low interest for up to five years.
Ecuador used the latter program in 2016 to get a $US364 million loan after a devastating earthquake.
But larger emerging-market countries such as Brazil, China and India are ineligible for such assistance, as are countries where the IMF has declared debt to be unsustainable, including Argentina.
Georgieva and World Bank President David Malpass underscored the importance of co-ordinated action to limit the economic and human impact of the virus.
The World Bank said on Tuesday it was providing $US12 billion in immediate funds to help developing countries improve their health services, disease surveillance, access to medical supplies and working capital for businesses.