IMF frees up $50b to battle contagion

The International Monetary Fund has called for a robust response from its members to the novel coronavirus pneumonia epidemic, as it made available $50 billion in emergency funding to support countries to cope with the crisis.

"With over one-third of our membership affected directly, this is no longer a regional issue — it is a global problem calling for a global response," Kristalina Georgieva, head of the 189-member global lender, said on Wednesday.

The outbreak has spread to nearly 80 countries and regions and has killed at least 3,000 people.

The IMF predicts that global economic growth will fall below last year's 2.9 percent, and said it will update its forecast in the coming weeks, Georgieva told a joint news conference with World Bank President David Malpass on the coronavirus response.

"Unfortunately, over the last week we've seen a shift to a more adverse scenario for the global economy," Georgieva said. "Under any scenario, global growth in 2020 will drop below last year's level. How far it will fall, and for how long, is difficult to predict."

At a time of uncertainty, it is better to take action, better to do more than to not do enough, she said.

The aim should be to stress actions that shorten and soften the economic impact, she said. "They should be timely and targeted to the sectors, businesses and households hardest hit."

Georgieva said the IMF has about $1 trillion in overall lending capacity, including up to $10 billion in rapidly disbursed emergency financing for low-income countries that can be accessed without a fully fledged IMF program, and about $40 billion for emerging markets that could potentially seek support.

"I called on member countries to help ensure that this facility is fully recharged and ready for the current crisis," she said.

Georgieva said the IMF was encouraged by the restart of some production in China, which is now at around 60 percent recovered and would increase to 90 percent in the coming weeks.

Asked to comment on US Treasury Secretary Steven Mnuchin's remarks on Tuesday that the US was not considering lower tariffs on imports from China in response to the coronavirus, Georgieva said, "We have taken a very consistent position that trade is good for growth, good for jobs, good for poverty reduction."

"We need more than ever a strong economy, because we are faced with a tremendous challenge," she told China Daily.

On Tuesday, the World Bank announced it had made $12 billion available to help countries respond to the coronavirus threat. The funding will prioritize the poorest countries and those at high risk with low capacity, the global lender said in a statement.

"We want to really find ways to supplement and augment the availability of working capital, which is the capital companies need to import goods to build up or rebuild their inventories," Malpass told reporters on Wednesday.