Read full remarks by IMF Managing Director Kristalina Georgieva at Conference of Latin American and Caribbean Leaders

Although we are headquartered in Washington D.C. USA, our reporters and editors are working around the globe to cover what you care about. We invite you to donate to our fundraiser to help us keep our quality news free and available to all.  

The conference on June 24, 2020, was organized by the Government of Spain

Thank you, President Sánchez, for bringingus together to launch this collective response to the COVID crisis in Latin America and the Caribbean. I am grateful for this unique opportunity to address such an important group of leaders from the region.

Thinking of a joint response is the right approach for countries that share so much, history, language, values, culture, and—more recently—a deep and multifaceted economic relationship sustained by several trade agreements and deep trade and investment flows. This is why the Mexican novelist Carlos Fuentes once said if a Spaniard wants to understand his country, he should travel to Latin America.

[read_more id="2" more="Read full article" less="Read less"]

As the pandemic expanded in many places in Latin America, the human toll has gone up. For this, you and the people in the region have my deepest sympathy and my firm commitment to stand by you as you strive to overcome the unprecedented twin crises—the health emergency and the economic recession.

Let me focus on three issues. First, our latest forecast for the global economy. Second, what it means for the region. Third, what the IMF is doing to assist now and as we look ahead.

On the forecast, today we released our latest assessment and have downgraded our growth projection for the world economy—a contraction of 4.9 percent for 2020. The recession will be deeper in 2020 and the recovery slower in 2021 than expected in our April forecast. We project a cumulative loss to the global economy of over $12 trillion over two years (2020-21)—and 10 percent of this total loss (about $1.2 trillion) stems from Latin America.

At the same time, countries’ monetary and fiscal actions have been strong and effective in helping prevent a massive wave of bankruptcies and unemployment. It worked—it put a floor under the world economy. Globally, fiscal actions now amount to about US$10.7 trillion; and monetary policy measures amount to over $6 trillion. A response like no other to a crisis like no other.

This is truly a global crisis, with nearly 95 percent of countries projected to face negative per capita income growth in 2020. Emerging markets and developing economies (excluding China) are projected to take a bigger hit to GDP growth than advanced economies in 2020-21. This translates into a risk of slowing down or even reversing the process of poverty reduction we have witnessed and enjoyed in recent years—and also slowing down the convergence between emerging market and advanced economies.

There are some signs of recovery, but it is going to be partial and uneven across sectors, countries and regions. While 75 percent of the world is reopening, we are not yet out of the woods. We are learning how to recover while we are still short of the scientific breakthrough towards a vaccine that we count on so much. Policymakers must remain vigilant, working towards recovery even as the pandemic remains with us.

Turning to Latin America and the Caribbean

Indeed, Latin America and the Caribbean has been hit particularly hard, with an expected contraction of 9.3 percent this year—its largest recession on record. The region has been impacted by the direct effect of the lockdowns and spillovers from the rest of the world through lower commodity prices, remittances and tourism as well as capital outflows. As the pandemic subsides and the world economy recovers, we are projecting a partial recovery in the region of 3.7 percent in 2021.

Within the region, the Caribbean economies are suffering even more due to their high dependence on one of the most dramatically impacted sectors—tourism—which, for some, accounts for 50 to 90 percent of GDP and employment. The approach of the hurricane season poses additional risks.

The policy response in the region has been swift. Central banks have intervened effectively, using all tools of monetary policy, through lower rates and expanded balance sheets.Given the scale of the crisis and unprecedented uncertainty, governments have had to also deploy fiscal measures to strengthen the health system, protect the most vulnerable and support employment and otherwise viable businesses. For example, Argentina and Paraguay have cash and food programs for disadvantaged families; Chile, Peru and Colombia are deploying wage subsidies and guarantees and loans to ailing SMEs. We have seen Ecuador—in a particularly difficult situation—targeting the most vulnerable. So far, the Caribbean countries have been successful in containing the virus better than others, and in expanding support for the most vulnerable.

Let me say again, this is the time to do all it takes to support those most affected by the crisis. So please spend whatever is needed but spend wisely and keep your receipts—both to return eventually to a sustainable fiscal position and to ensure the accountability of pandemic-related expenditures.

Governments should also strive for effective public policy interventions, stepping up testing and tracing efforts, delivering clear communications on health developments and policies, and reducing risks of contagion by diversifying transfer mechanisms, and increasing digital delivery—especially in the megacities of Latin America. And you are right to continue to focus on reforms to support competitiveness and growth—this is even more important today than before this crisis.

The role of the IMF

At the Fund, we acted swiftly to support our membership from the moment we saw this crisis coming. We stand ready to place our US$1 trillion lending capacity at the service of our membership.

We have doubled access to emergency funding, and we have approved requests from 70 countries for emergency financing, with disbursements totaling about US$25 billion dollars. This includes about US$5.5 billion of total financing to 17 countries in the Caribbean, Central America and South America. We also approved access to new Flexible Credit Line facilities to Chile and Peru, and renewed Colombia’s line, expanding our precautionary lending to the region to US$107 billion.

We will also continue our tremendous engagement with the region on capacity development and policy advice. As we live with the pandemic, governments must be agile and start planning for the eventual recovery.

First, by preparing for an eventual shift in policies—when the time comes to help workers transition back to employment.

Second , ensuring that the financial system is solid and reliable and can support the future recovery.

Third, usingthe fiscal stimulus wisely—not onlyto help boost growth and employment but to create a more resilient post-pandemic world. And as disruptions fade way, fiscal soundness and debt sustainability should become a policy priority.

Let me conclude by saying that if there is one lesson from this crisis, it is that we are in this together—that international cooperation is absolutely critical.

Our society is only as strong as its weakest member. This calls for solidarity with the most vulnerable people and with the most vulnerable countries.

I would like to praise Spain and the EU for leading the global partnership to make sure a vaccine is available to all. And I want to stress that the IMF works very closely with our sister organization—the World Bank—on debt relief, and with all development banks and partner organizations to mobilize and support for the membership in the most effective manner.

We have stepped up massively support for countries in need—and are seeking ways to do more.

We support the G20 initiative to suspend debt service payments to official creditors, that could make some US$12 billion available to 73 low-income countries. In the region, 5 countries are considering calling upon this initiative.

We are aiming to land on the other side of this crisis with an economy that is more resilient, greener, smarter, and fairer . That means supporting low-carbon and climate-resilient growth, unlocking the full potential of the digital economy, and investing in people through quality healthcare and education—to narrow the gap between the rich and the poor.

We at the IMF will do our part in this transformation.

Thank you for giving me the chance to be with you today.


TODAY NEWS AFRICA is registered and headquartered in Washington, District of Columbia, United States of America. Our publication is widely read, respected and influential. By providing daily answers to questions our readers have about the people, the businesses and the continent of Africa, we are reaching a diverse and wide audience from around the world. Our readers, many of them world leaders, trust us because we are independent and truthful. Our advertisers understand the difference between news, views and ads. Contact us:


Please enter your comment!
Please enter your name here

Trending Now



South African defense minister Nosiviwe Mapisa-Nqakula will not receive salary for 3 months for flying ANC party members to Zimbabwe on air force plane

South African President Cyril Ramaphosa has issued the Minister of Defense and Military Veterans Ms Nosiviwe Mapisa-Nqakula with a formal reprimand...

Nigerian activists send open letter to President Buhari urging him to prosecute more than 100 high-profile corruption cases he has ignored

Nigerian activists have sent an open letter to President Muhammadu Buhari urging him to prosecute more than 100 high-profile corruption cases...

IMF has given $31 billion to 76 countries to respond to COVID-19, including over $10 billion to 47 low income nations

The International Monetary Fund (IMF) has given $31 billion in emergency financing to 76 countries in the world to respond to...

Gunmen ambush convoy of Governor Umar Babagana Zulum of Borno State in Nigeria, kill several people

President Muhammadu Buhari has condemned an ambush on Friday on the entourage of Governor Umar Babagana Zulum of Borno State, which...

Central African Republic President Faustin Archange Touadéra announces candidacy for December election

Central African Republic President Faustin Archange Touadéra has announced his candidacy for the presidential election next December.“It’s...


Damning report finds detainees in Iran were sexually abused and given electric shocks in gruesome post-protest crackdown

Iran’s police, intelligence and security forces, and prison officials have committed, with the complicity of judges and prosecutors, a catalogue of...

IMF has given $31 billion to 76 countries to respond to COVID-19, including over $10 billion to 47 low income nations

The International Monetary Fund (IMF) has given $31 billion in emergency financing to 76 countries in the world to respond to...

Ramphosa urges world leaders to fight racism, grant Africa more Security Council seats, lift sanctions against Zimbabwe and Sudan and cancel continent’s interests on debt

African Union Chairperson, the President of South Africa, Cyril Ramaphosa, on Tuesday, urged the United Nations General Assembly to fight racism,...

Coronavirus can be transmitted through the air at distances farther than six feet, U.S. CDC says

The United States Centers for Disease Control and Prevention (CDC) updated its guidance at the weekend to acknowledge that the novel...

WHO says only $35 billion needed to end acute phase of COVID-19 in the world

The World Health Organization (WHO) says $35 billion is needed to end the acute phase of COVID-19 pandemic in the world...

IMF has given $31 billion to 76 countries to respond to COVID-19, including over $10 billion to 47 low income nations

The International Monetary Fund (IMF) has given $31 billion in emergency financing to 76 countries in the world to respond to COVID-19 pandemic, including over $10 billion to 47 low income nations."The Fund and its response to the Covid-19 crisis. As of today, we have given emergency financing to 76 countries, that's totaling around $31 billion at this...


[read_more id="2" more="Read full article" less="Read less"]