Washington DC, February 20: Coronavirus epidemic has already disrupted economic growth in China and its spread to other countries can derail a fragile projected recovery in the global economy this year, the International Monetary Fund (IMF) has said.
In a note prepared for G20 finance ministers and central bankers meeting in Riyadh this week, the IMF said a plethora of risks face the global economy, including the fast-spreading coronavirus and a renewed spike in US-China trade tensions besides climate-related natural disasters.
Amid continued uncertainty about the impact of the coronavirus, known as COVID-19, the IMF said it was sticking to its January forecast for 3.3 per cent growth in the global economy this year, up from 2.9 per cent in 2019, already a downward revision of 0.1 percentage points from its forecast in October.
"The coronavirus is our most pressing uncertainty: a global health emergency we did not anticipate in January. It is a stark reminder of how a fragile recovery could be threatened by unforeseen events," said IMF's Managing Director Kristalina Georgieva.
"The global economy is far from solid ground. While some uncertainties have receded, new ones have emerged. The truth is that uncertainty is becoming the new normal," she said in the note on Wednesday (local time).
A long-lasting and more severe outbreak will result in a sharper and more protracted growth slowdown in China, said Georgieva."Its global impact would be amplified through more substantial supply chain disruptions and a more persistent drop in investor confidence, especially if the epidemic spreads beyond China," she said.
The IMF urged policymakers to maintain fiscal and monetary policy support. Low inflation requires monetary policy to stay accommodative in most economies, it said.