World economy suffers
The International Monetary Fund’s Managing Director Kristalina Georgieva issued
a statement in which she outlined the outlook for global growth:
“For 2020 it is negative – a recession at least as bad as during the global financial crisis or worse.” But she added: “We expect recovery in 2021. To get there, it is paramount to prioritise containment and strengthen health systems –everywhere.” The Organisation for Economic Co-operation and Development warned on March 23, that the shock from the virus is already bigger than the 2007-2009 global financial crisis. World economies are expected to contract by 12 per cent in the first quarter of 2020, and April is not looking any better for any of the countries hit by coronavirus.
Closer to home, the Reserve Bank of Fiji has forecasted that our economy is expected to contract by 4.6 per cent.
While factories in China are reopening, the shoppers are not out buying the goods. America is still grappling with COVID-19. Healthcare workers in USA are fighting against time and with lack of resources to provide relief to patients and those infected by this pandemic.
OECD secretary general Angel Gurría said many countries would fall into recession and countries would be dealing with the economic fallout of the COVID-19 pandemic for years to come.
“Even if you don’t get a worldwide recession, you’re going to get either no growth or negative growth in many of the economies of the world, including some of the larger ones, and therefore you’re going to get not only low growth this year, but also it’s going to take longer to pick up in the in the future.”
This statement comes after the United Nations Conference on Trade and Development, the UN trade agency, warned of a slowdown of global growth to under 2 per cent this year, effectively wiping $1 trillion off the value of the world economy.
In the vein, the Asian Development Bank on April 3, warned that the global cost of the outbreak could hit $4.1 trillion. The extent of the economic damage still depends on how the virus spreads throughout Europe, the US and other major economies, reports Bloomberg.
Why is this important for Fiji? Fiji does not operate in isolation. What happens in the world market has a direct impact at home. Our tourism sector is not expecting a miraculous revival anytime soon. Additional reporting from Bloomberg and World Economic Forum