IMF chief Kristalina Georgieva has warned of a possible second wave of the coronavirus, urging countries around the world to keep their support programs in place.
Georgieva said Thursday that the global economy still faces challenges even though there are some signs of recovery from the pandemic.
Activity “has started to gradually strengthen… But we are not out of the woods yet,” Georgieva said in a message to G20 finance ministers ahead of their weekend meeting in Saudi Arabia.
“A second major global wave of the disease could lead to further disruptions,” she warned, stressing to policymakers that the unprecedented “economic lifelines to individuals and workers… must be maintained.”
So far, over 13,716,000 people have been infected worldwide and more than 587,000 have died.
Last month, the IMF further cut its 2020 global output forecasts, projecting a 4.9 percent contraction and weaker-than-expected recovery for the next year.
Georgieva said despite $11 trillion in fiscal measures provided by G20 members and other countries and massive central bank liquidity injections, dangers lurked.
The threats include a major new wave of infections, stretched asset valuations, volatile commodity prices, rising protectionism and political instability.
She went on to say that some countries lost more jobs in March and April than those which had been created since the end of the 2008 financial crisis, adding, many of those jobs will never return.
Job losses, bankruptcies, and industry restructuring could present serious challenges for the financial sector, she said, adding, coordination should continue across central banks and international financial institutions ought to continuously provide financial support.
“Monetary policy should remain accommodative where output gaps are significant and inflation is below target, as is the case in many countries during this crisis,” she said.
