Emerging markets and developing economies will not be spared, but in some cases they fare better. In China, where the virus originated and where draconian measures were imposed to combat it, growth is forecast to slow to a rate of 1.2 percent this year.
Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said the economic damage was not likely to be erased quickly, particularly if people continue to be worried about contracting the virus.
“We know after the Great Depression people carried the scars of that experience with them for many, many years,” Mr. Kashkari said in an interview on the “Today” show. “I think the longer that this goes on, the more people who are affected by it, the longer that recovery is going to be.”
The Group of 7 finance ministers and central bankers, who were supposed to meet in Philadelphia this week, held a virtual meeting on Tuesday to assess the global economic crisis.
In a joint statement following the meeting, they pledged to coordinate their efforts to restore economic growth, protect jobs and reinforce the global financial system. They noted that the I.M.F. was prepared to deploy its $1 trillion lending capacity to help vulnerable economies cope with recessions.
Does private equity deserve a public bailout?
Private equity firms like Apollo successfully lobbied the Federal Reserve to buy a wider range of riskier assets than originally planned. Those firms are now pushing for even more federal funds in future stimulus bills, writes Steven Davidoff Solomon, the faculty director at the Berkeley Center for Law, Business and the Economy, in today’s DealBook newsletter.
Mr. Solomon, a.k.a. the Deal Professor, notes that even though private equity firms are sitting on more than $1 trillion in uncalled capital, they are aggressively angling for stimulus funds. These behemoths own large parts of industry and can credibly argue that public pensions are dependent on returns from private equity investments, and that their portfolio companies employ millions of workers.