IMF Managing Director Expects a V-shaped Recovery for Chinese Economy

Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva said on 12 February that the organization is gathering data to assess the full impact of the coronavirus outbreak in China.

Speaking at the IMF headquarters in Washington D.C., Georgieva said that the Fund has begun to make a full assessment of the impact of the outbreak on the global economy, but the situation is “still at the point of quite a lot of uncertainty”. On the outlook of the economy, she said that the primary forecast now is for a quick recovery of China’s economy as factories gear back up to make up for lost time and warehouses are re-supplied. “The most likely scenario we now view is a V-shaped impact. In other words, sharp decline in economic activities in China, followed by a rapid recovery and a total impact on China relatively contained.”

As for the outbreak’s impact on the world economy, Georgieva said that there are uncertainties on the way it is impacting sectors of the economies and value chains. Compared to 2003, the year of the SARS outbreak, the Chinese economy is much more significant for the world. Its weight in the world economy has grown to 19% from 8% back then and it is now much more integrated in Asia and with the rest of the world.