IMF ASKS FOR COOPERATION OVER COVID-19

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The International Monetary Fund asked for international cooperation in dealing with the negative impact of the COVID-19 epidemic on the global economy. It also recommended the Korean government to maintain its expansionary fiscal policy.

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The IMF mentioned in its World Economic Outlook that global growth is bottoming out, but recovery seems uncertain. Despite the downward adjustment, this year's global growth rate is expected to be 3.3%, higher than last year's 2.9%. However, advanced nations are expected to show slow growth even in 2020. According to the global body, the spread of COVID-19 put a halt to China's growth as well as economic improvements in multiple emerging markets and developing countries. These factors contributed to a growth rate lower than the previous average. The outbreak was cited as an uncertainty that threatens the world economy. The main concern is how the disease forced production in China to halt and limit mobility around affected area. Morgan Stanley projected that Beijing's economic growth could dip all the way down to 3.5% in the first quarter and 5.6% for the entire year due to COVID-19. The IMF expressed concerns that a prolonged epidemic could further hurt the tourism industry and disrupt supply chain, ultimately dealing a more serious blow to the global economy. The international agency emphasized the need for worldwide cooperation in order to rapidly contain the virus and stop creating new uncertainties. As global recovery remains very uncertain, the IMF asked policymakers of fiscally sound nations to not withdraw their expansionary fiscal and monetary policies too quickly. South Korea, Australia and Germany were cited as the countries with ample fiscal capabilities. The IMF noted that industrialized economies such as South Korea need to keep easing monetary policies until inflation approaches the target rate.