G20 vows close monitoring of virus pandemic’s impact

WASHINGTON: Finance chiefs from the Group of 20 economies agreed on Monday to closely monitor the economic impacts of the coronavirus pandemic, while the International Monetary Fund warned of a looming recession possibly worse than that during the 2008 global financial crisis.

The spread of the new coronavirus, which has heavily disrupted business activities and restricted people’s movements worldwide, is raising fears that the situation may turn into a global economic crisis.

Acknowledging that the outlook for the global economy has “significantly deteriorated” since their meeting in Saudi Arabia in late February, the G20 finance chiefs said in a press release following their phone talks that they would pay close attention to the pandemic’s “impact on markets and economic conditions” and “take further actions to support the economy during and after this phase.”

They also agreed to craft a joint action plan, which will outline the individual and collective actions that G20 members have taken and will be taking to respond to the ongoing spread of the virus.

In a separate statement, IMF chief Kristalina Georgieva said that the outlook for global growth for 2020 was “negative,” indicating “a recession at least as bad as during the global financial crisis or worse.”

But she added that the Washingtonbased institution was expecting the global economy to pick up in 2021.

“To get there, it is paramount to prioritise containment and strengthen health systems — everywhere. The economic impact is and will be severe, but the faster the virus stops, the quicker and stronger the recovery will be,” Georgieva said, while calling for more fiscal stimulus measures to support the global economy.

In Tokyo, Japanese Finance Minister Taro Aso told reporters after the phone talks that Japan was “very concerned” about the potential economic repercussions and that the G20 members must focus their resources on preventing the virus from further spreading as well as developing a treatment and vaccine.

He also said it was important that the G20 economies show their determination “to take timely action to tackle the economic and health crisis without hesitation.”

The teleconference among the finance ministers and central bank governors took place partially to prepare for an extraordinary virtual G20 summit to be held “in a few days,” according to the press release issued by Saudi Arabia, the host of the G20 meetings this year.