The world is currently facing a devastating impact due to the COVID-19 outbreak and has clearly entered into a recession phase, according to the International Monetary Fund. The recovery will take place only if the international community succeeds in containing the virus and prevents liquidity problems from becoming a major solvency issue. While the lockdown is the main reason for the stunted economy, the same is highly necessary to help us come out of this period and step into the recovery phase. Until the spread of the virus is contained, it seems impossible for people to go back to their normal lives.
The primary concern regarding the long-lasting impact of the sudden pause on the world economy due to the lockdowns is the increased risk of a wave of bankruptcies and layoffs. To avoid this, several countries have taken significant measures to address the ongoing global health crisis and aid their economies on the fiscal front. The IMF chief has stated that 81 emergency financing requests, including 50 from the lower-income countries developing economies, have already been received. The IMF chief also said that the current estimate of the overall financial requirements of emerging markets on the lower end is about USD 2.5 trillion. The G-20 recently reported fiscal measures amounting to USD 5 trillion, which is nearly 6 percent of the global GDP.
It is expected that countries step up their containment measures aggressively so that the economy’s recovery can be expedited. Countries also need to adopt well-targeted measures, mainly focusing on their healthcare and financial systems. Nations across the globe are employing all resources they have at their disposal. The IMF has also announced that they are responding immediately so that they can make the recession as short as possible and mitigate the damage it will cause. They are also looking into the recovery path and are making sure that the measures put forward can be supportive in this regard.