We support India's proactive Covid-19 response in a crisis like this: IMF

The impact of the coronavirus on the Asia-Pacific region will be severe, across the board, said IMF

A day after International Monetary Fund (IMF) predicted India's growth rate to be 1.9 per cent in 2020, the lending agency on Wednesday said it supported the proactive decisions taken by the government in its fight against coronavirus.

"India entered the pandemic turmoil in the midst of a credit crunch-induced slowdown and its recovery prospect becomes more uncertain," said Chang Yong Rhee, the Director of the IMF's Asia and Pacific Department, news agency PTI reported.

"Despite the economic slowdown, the government implemented a nationwide lockdown and we support India's proactive decision," Rhee added.

India entered a three-week lockdown on March 25, which was slated to end on April 14, but later was extended till May 3.

Asia's economic growth this year will grind to a halt for the first time in 60 years, as the coronavirus crisis takes an "unprecedented" toll on the region's service sector and major export destinations, Rhee said.

This is worse than the annual average growth rates throughout the Global Financial Crisis (4.7 percent) or the Asian Financial Crisis (1.3 percent). Actually, Asia has not experienced zero growth in the last 60 years, he said. "That said, Asia's growth still fares better than other regions."

For 2021, he said, there is hope. If containment policies succeed there could be a rebound in growth, he said.

Meanwhile, MD Kristalina Georgieva on Wednesday said the lending agency is facing a huge demand from an unprecedented 102 of the IMF's 189 member countries, adding it is prepared to commit its full $1 trillion to meet the demand.
 

It is a crisis like no other, Georgieva told reporters, reiterating her agency's assessment that the global economy is in its worst downturn since the Great Depression of the 1930s.

She and World Bank President David Malpass both praised a decision taken Wednesday by the finance ministers and central bank presidents of the Group of 20 major industrial countries to declare a suspension of debt payments for low income countries.

The debt suspension from May 1 through the end of this year is aimed at allowing poor countries to keep an estimated $12 billion that they can use for meeting health care and other needs stemming from the coronavirus.

In a new economic outlook prepared for this week's discussions, the IMF forecast that the global economy will shrink by 3% this year, far greater than the 0.1% dip that occurred in 2009 in the wake of the global financial crisis.