Emerging economies to feel Covid-19 effects despite IMF support
Factoring in the Covid-19 shocks, the IMF projects that the gross government debt-to-GDP ratio will reach 85.6% of GDP by the end of 2021
Financial support packages by international lenders such as the International Monetary Fund (IMF) are likely to be of little help to emerging economies, which are already reeling from huge debt piles, a global trade credit insurer said.
The IMF has received more than 100 requests for support from member countries including SA, whose economies have been battered by the Covid-19 crisis. In SA, measures to curb the spread of the virus, including the lockdown, which came into force at the end of March, are set to lead to a jobs bloodbath and have put government's finances under severe strain. Economists have predicted that SA's budget deficit for 2020 could be double the 6.8% tabled in the February budget.