The Director-General of WHO, Dr. Tedros Adhanom Ghebreyesus (Dr. Tedros), made the announcement on January 31, 2020, about the criticality of COVID-19. Dr. Tedros stated, “There are now 98 2019nCoV cases in 18 countries outside China, including 8 cases of human-to-human transmission in four countries, Germany, Japan, VietNam and the United States of America. So far we have not seen any deaths outside China, for which we must all be grateful. Although these numbers are still relatively small compared to the number of cases in, we must all act together now to limit further spread.” ..

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COVID-19 - IMPACTS ON THE GLOBAL ECONOMY

The spread of the COVID-19 was first and foremost a public health emergency, but it was also a major economic threat. The COVID-19 shock was causing a recession in some countries and had depressed global annual growth in the financial year 2019-20 to below 2.5%, the recessionary threshold for the world economy..

MEASURES TO MITIGATE THE IMPACTS

The IMF’s Chief Economist, Gita, advised policy makers across the world to implement targeted fiscal, monetary and financial market measures to support households and businesses impacted by the coronavirus outbreak. She said, “Central banks should be prepared to provide liquidity to banks and financial companies, especially those who lend to more vulnerable small- and medium-sized businesses.” She added, “Broader monetary stimulus such as interest-rate cuts or asset purchases can boost confidence and support financial markets if there’s a risk of a significant tightening in financial conditions.”.

THE ROAD AHEAD

“…it is necessary to align the responses to the Covid-19 shock in a way that reorients the world economy in a more caring, inclusive and financially stable direction. If the Covid-19 crisis has negative impacts on household and corporate spending, governments can avoid a slump by increasing their own demand, especially for goods and services that aren’t in short supply, such as construction and social services. A temporary boost to emergency health spending – with free care for those affected by Covid-19 – is an obvious response, and the same holds for emergency cash transfers for those hit by a sudden loss of income, especially in the informal economy. The welcome announcement by the IMF to provide $50bn to mitigate the effects of the crisis should take the form of grants for the most vulnerable countries, and zero interest loans for others,” emphasized the UNCTAD conference report.

EXHIBITS

Exhibit I: China Economic Growth Forecasts after COVID-19 Outbreak