World needs coordinated fiscal response to pandemic: IMF chief

WASHINGTON: Global governments must work together to provide massive spending as in the 2008 financial crisis to help the economy withstand the damage from the coronavirus pandemic, IMF chief Kristalina Georgieva said Monday.

Emerging markets are facing a massive outflow of cash and will need support as well, she said in a blog post. She again pledged that the IMF "stands ready to mobilize its $1 trillion lending capacity to help our membership," including $50 billion in rapidly deployed funds for emerging and developing economies.

Governments have taken some steps, especially to address health efforts to contain the spread of COVID-19, but they "should continue and expand these efforts to reach the most affected people and businesses -- with policies including increased paid sick leave and targeted tax relief," Georgieva said.

But more is required beyond individual country actions, and "as the virus spreads, the case for a coordinated and synchronized global fiscal stimulus is becoming stronger by the hour." In 2009 alone, countries in the Group of 20 committed two percent of GDP, or over $900 billion, "So, there is a lot more work to do," she said.

Meanwhile, the US Federal Reserve joined forces on Sunday with the European Central Bank and others to provide dollar swap lines to ensure global financial markets have guaranteed access to sufficient cash to continue to operate, "steps we know have worked before," Georgieva said.