IMF calls for global recession – opportunity for Bitcoin?
The International monetary Fund (IMF) has declared that we have entered a global recession – a recession that is as bad or worse than the previous global financial crisis. 80 countries have asked the IMF for emergency aid. Meanwhile, the G20 has reported fiscal measures in the amount of about 5 trillion dollars or about 6% of global GDP.
Kristalina Georgieva, the Executive Director of the International monetary Fund, spoke on Friday at a press conference on the current economic situation. She also explained the measures taken by the IMF and the G20 countries, in order to prevent a total economic collapse due to the Coronavirus pandemic. The press conference was held after the Meeting of G20 leaders on the previous day. “We have assessed the growth prospects for 2020 and 2021,” said Georgieva, and said:
It is now clear that we have entered a recession as bad as or worse than 2009.
She added that a recovery in this year will only take place if the Coronavirus is globally contained and prevents liquidity problems to a solvency problem, and stressed that a wave of bankruptcies and layoffs can undermine the recovery.
To avoid a total economic collapse, have taken many of the countries in extreme measures.
The G20 reported yesterday on fiscal measures in the amount of about 5 trillion dollars or about 6 % of global GDP,
explained Georgieva.
To support this, the IMF launched yesterday evening a “policy action tracker” for 186 countries, to help all and to see who needed what help and to what extent. The head of the IMF continues to say (freely translated):
We have seen an extraordinary increase in requests for IMF emergency funding – roughly 80 countries have made inquiries and it will probably come even more. Normally, we never have more than a handful of requests at the same time.
Georgieva also announced that the IMF Executive Board has approved on Thursday the first of these emergency amendments for the Kyrgyz Republic (Kyrgyzstan).
We also see that in the emerging markets of a variety of problems arises – the spread of the Virus, the shutdown of economies, capital outflows, and for Commodity exporters – a price shock. Our current estimate for the financial needs of the emerging countries is 2.5 trillion dollars – an estimate at the lower end of which the reserves and domestic resources would not be sufficient.
The IMF Chief explained that her organization is taking a number of measures and with other institutions such as the world Bank works. First, the IMF is proposing to double its capacity for emergency financing, to simplify its processes and to fill the gap in its concessional financing. Second, the Fund will review its lending instruments, such as the expansion of the use of precautionary credit lines. The IMF has also approved Changes in the application of the Catastrophe Containment and Relief Trust (CCRT), which he hoped would be a certain debt relief to its poorest member countries. The UK, Japan and China have already pledged their support for increasing the capacity of the CCRT course.
In spite of the ongoing crisis in Bitcoin, over the Support can hold a Level to the $ 6,000 mark. However, the BTC shows it is not a standalone development, as it is detached from the stock market, so that must prove to be Bitcoin for the reputation as a “digital Gold” yet.
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