The IMF estimates global economic losses since the start of the COVID pandemic at $3.7 trillion

Since the start of the CORONAVIRUS pandemic, the global economy has lost $3.7 trillion, and economic fragmentation of countries threatens to further undermine its growth prospects, said IMF HEAD Kristalina Georgieva .

Global economic losses from 2020 to 2023 amounted to a record $3.7 trillion, and the only major state that managed to return to pre-pandemic production levels was the United States. This was stated by the head of the International Monetary Fund (IMF), Kristalina Georgieva, during her speech in Côte d'Ivoire.

Economic fragmentation threatens to further undermine global economic growth prospects, especially for emerging and developing countries, she said.

“The US is the only major economy where output has returned to pre-pandemic levels. The rest of the world continues to lag behind trend, with low-income countries suffering the most. Why? Because they had extremely limited capabilities to buffer their economy and support the most vulnerable segments of the population,” Georgieva noted.

She also stressed that the IMF has an “important role to play” in helping countries shape policy choices and implement successful growth strategies. Among the fund's priorities, she highlighted fighting inflation and ensuring financial stability, improving governance and state capacity, as well as filling gaps in infrastructure development in developing countries.

Georgieva warned back in the spring that the vulnerability of the global economy was growing amid attempts by central banks around the world to contain high inflation and that the fragility of this system threatened financial instability and a slowdown in economic growth. The head of the IMF assured that the world economy is not moving toward a repeat of the global financial crisis of 2008, despite problems in the banking sector in the United States and Switzerland.

At the same time, the head of the IMF warned of potential negative consequences due to the conflict in Ukraine and growing mistrust between the United States and CHINA. She said it was important for the West to stand up for its values, but cooling relations with other global players could lead to trade losses of between $200 billion and $7 trillion, equivalent to 0.2% to 7% of global GDP.

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In December, the IMF is due to agree on reforms to its key mechanism - the distribution of countries' quotas for borrowing from the fund. Representatives of developing countries have been trying for many years to achieve a revision of the quota formula, which now depends on the size of GDP (at purchasing power parity) and a number of additional criteria, including the degree of market openness and the size of reserves. If the quota formula is revised and redistributed in accordance with countries' GDP, the US quota will decrease from 17.43% to 14.8%, and China's quota will increase from the current 6.4% to 14.4%.