Powell and Georgieva "Closely Monitoring" COVID-19 Risks

Jerome Powell, Chair of the U.S. Federal Reserve System [Photo by AP]

[Asia Economy New York=Correspondent Baek Jong-min] The U.S. Federal Reserve (Fed) and the International Monetary Fund (IMF) have expressed concerns over the spreading novel coronavirus infection. They unanimously assessed that another uncertainty capable of shaking the global economy has emerged.

On the 29th (local time), Jerome Powell, Chair of the Fed, stated at a press conference after concluding the first Federal Open Market Committee (FOMC) meeting of the year, "The novel coronavirus is one of the uncertainties emerging in the recovering global economy." During the Q&A session with reporters, Powell emphasized, "The novel coronavirus is a very serious issue," raising concerns by saying, "There may be some disruptions to activities in China and possibly worldwide due to travel restrictions and business interruptions."

On the same day, the FOMC kept the benchmark interest rate unchanged at 1.50?1.75%. Powell mentioned, "We are monitoring the situation very carefully," suggesting that if severe economic ripple effects occur due to the novel coronavirus, it could influence monetary policy decisions. Although Powell said, "I will not speculate now from the perspective of uncertainty," he anticipated that there could be impacts on major trading partners adjacent to China.

Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF)
[Image source=Reuters Yonhap News]

Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), also raised awareness about the negative effects the novel coronavirus could have on the economy. In an interview with France 24, a French public broadcaster, Georgieva said, "The novel coronavirus will affect China's economic growth," noting that the tourism sector is already suffering serious damage. She added, "At this stage, it is difficult to quantify the economic impact of the novel coronavirus." The IMF currently estimates China's economic growth rate at 6% for this year. If the novel coronavirus spreads further, it is possible that China will struggle to meet the IMF's growth forecast.

In its Latin America and Caribbean Economic Outlook report released on the same day, the IMF also diagnosed, "Global monetary policy easing and the U.S.-China Phase One trade agreement have somewhat eased previous risks, but new risks have emerged." The novel coronavirus was included among the risks identified by the IMF. The report stated, "If the novel coronavirus spreads globally, it could significantly disrupt global economic activity, trade, and travel."

This content was produced with the assistance of AI translation services.