The coronavirus has taken the world economy to a recession which will be as bad or worse than the financial meltdown of 2009, IMF chief Kristalina Georgieva said Friday.
"It is clear that we have entered a recession, as bad or worse than 2009," she said in an online press briefing.
Georgieva said that a key concern of the "sudden stop" of the world economy is a wave of bankruptcies and layoffs that can not only undermine the recovery but can erode the fabric of our society.
For the emerging markets, she said the fund's estimates financial need of about $2.5 trillion to come of the current crisis. But she warned that the estimate is on the lower side. Over 80 countries already have requested emergency aid from the International Monetary Fund.
The IMF chief said that though in recession, a recovery is very much possible in 2021 if the virus is contained across the globe.
"We do project a recovery in 2021. In fact, there may be a sizeable rebound but only if we succeed in containing the virus everywhere and prevent liquidity problems from becoming a solvency issue," Georgieva said.
India too, is staring at a slowdown. Earlier, Moody's Investors Service slashed its estimate of India's GDP growth during 2020 calendar year to 2.5%, from an earlier estimate of 5.3% and said the coronavirus pandemic will cause unprecedented shock to the global economy.
In its Global Macro Outlook 2020-21, Moody's said India is likely to see a sharp fall in incomes at the estimated 2.5% growth rate, further weighing on domestic demand and the pace of recovery in 2021.
Standard and Poorâ€™s (S&P) too, issued a fresh outlook for 2020 saying the growth rate would be only 5.2%. The rating agencyâ€™s earlier projection was 5.7%. OECD (Organisation for Economic Cooperation and Development) had already slashed its forecasts for 2020 to 5.1%.