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IMF Announces Funds To Combat COVID-19 Epidemic, Low Global Economy

March 5, 2020 (EIRNS)—IMF Managing Director Kristalina Georgieva, in an interview with CNBC today, announced that the Fund is making $50 billion in aid (loans) available to developing countries for public health protection against the coronavirus. Some $10 billion of it, Georgieva said, along with $12 billion from the World Bank, is supposed to be concessionary and interest free, and for nations with the least-developed economies.

“The $40 billion is for countries that are middle income, and they can approach us and receive the funding immediately,” she said.

Georgieva said the IMF will focus on

“What are the financial needs, and engaging with these countries to make sure that they are aware of this resource, and we can immediately respond to them.... We will attack very quickly as requests come. What the countries would use the money for: We would like very much to see them prioritizing, first and foremost, urgently beefing up their health service capacity.... And secondly, to use it for fiscal measures that are well targeted to households, businesses that are most directly impacted by the crisis.”

Georgieva’s long statement about “benign scenarios” and “adverse scenarios” for the world economy at this point, allowed the possibility for a long, relatively deep economic decline and a slow recovery, internationally. She said the IMF is reassessing (for a second time already) its 2020 global growth forecast. That China’s economic activity is now up to 60% of normal, she considered good news; and better, that People’s Bank of China Governor Yi Gang estimates that it will reach 90% of last year’s levels by the end of March. But China’s GDP growth will be lowered for the entire year.

The only action the IMF is recommending to developed countries is to establish new credit lines for their small and medium-sized enterprises, Georgieva said. This is now a common position among Atlanticist financial officials and economists: It holds that the global debt burden of $250 trillion-plus, 340% of world GDP, is far too high to allow for any large infrastructure-building “stimulus” by leading governments. Hung Tran, the former executive managing director of the Institute of International Finance (big bank lobby), took the same position in a March 2 commentary on the website of Atlantic Council, where he is non-resident senior fellow.

Lastly, Georgieva claimed, “The financial system is holding. We are not seeing major risk.” EIR is seeing it.

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