The World Bank will look to deploy “as much as $160 billion” (Dh587.6bn) over the next 15 months to mitigate the economic impact of Covid-19, the organisation’s president, David Malpass, said.
Its efforts will be matched by other multilateral lenders such as the Asian Development Bank and the Inter-American Development Bank, which will contribute a further $80bn, bringing the total to more than $240bn.
The support being offered is being “tailored to the nature of the health, economic and social shocks that countries are facing” as a result of Covid-19, Mr Malpass said in a press conference being held virtually as part of the World Bank and International Monetary Fund’s annual Spring Meeting.
The World Bank had focused on “taking fast, broad-based action” in response to the crisis, Mr Malpass said, which has resulted in new, health emergency programmes being set up in 64 countries so far, with a plan to extend this to more than 100 by the end of this month.
The Covid-19 pandemic "is causing deep economic harm and threatening to erase decades of economic progress and poverty reduction”, Mr Malpass said.
“We’re expecting a major global recession - our estimates suggest a much deeper downturn than the great recession - and we are responding forcefully and massively,” he said.
Earlier this week, the International Monetary Fund forecast global economic output will shrink by 3 per cent this year, a sharp downward revision from its previous estimate of growth of 3.3 per cent as measures put in place to stop the spread of Covid-19 hit global trade and bring industries such as aviation and tourism to a virtual halt.
The World Bank intends to provide over $50 billion in grants and concessional credits to International Development Association (IDA) countries - a group of nations housing two-thirds of the world's extreme poor - Mr Malpass said. He also thanked the G20 nations for their agreement announced on Wednesday to provide debt relief to these countries for the remainder of 2020.
“That way, they can concentrate their resources on fighting the pandemic, and it’s economic and social consequences,” Mr Malpass said.
Disruptions to domestic food supply chains were emerging “as a pressing issue in many countries”, as labour shortages hit trade and logistics, while loss of income also affect people’s ability to pay for it, he added.
“We have a double problem of both the supply and demand side being disrupted in such a critical area as food and agricultural supply,” Mr Malpass said.
He also said the International Finance Corporation, a sister arm of the World Bank, was looking to extend support to small and medium-sized enterprises in the developing world that have been hit by a loss of custom through the creation of more working capital and trade finance facilities.