IMF: Market ‘disconnect’ could worsen virus downturn | Malay Mail

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WASHINGTON, June 25 — Recent gains in global financial markets despite the coronavirus downturn’s “huge” economic uncertainties are a potential threat to the recovery if investors abruptly change their minds, the IMF cautioned today. Markets have been cheered by the massive support provided...

An exterior view of the building of the International Monetary Fund , with the IMG logo, is seen on March 27, 2020 in Washington, DC. — AFP pic

But the paper warns of the dangers lurking in the future from the flood of “unconventional” policies that have left the global economy awash in easy money. The IMF now projects the global economy will contract by 4.9 per cent this year, according to the updated World Economic Outlook released yesterday, and warned that the crisis is not over.

European and US stock markets sank yesterday, with investors worried over rising coronavirus infections in several countries as well as renewed trade tensions between Brussels and Washington.The “unprecedented” and “unconventional” support from authorities providing liquidity, lending and low interest rates, “has undoubtedly cushioned the impact of the pandemic on the global economy and lessened the immediate danger faced by the global financial system,” the report said.

 

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