Coronavirus: IMF to cut global growth outlook amid ‘dire’ scenarios

Irish financial union calls on banks to ensure no affected staff lose earnings

The International Monetary Fund's managing director, Kristalina Georgieva, has said the organisation it is preparing to cut its global growth forecasts as the coronavirus outbreak is moving the world economy towards "more dire scenarios".

Ms Georgia said on Wednesday in Washington that the fund, which has downgraded its growth predictions a number of times in the past year, now expects 2020 growth to come in below last year’s rate.

In January the fund estimated 2019 global growth at 2.9 per cent and 2020 growth at 3.3 per cent. Last month it said the coronavirus outbreak could shave 0.1 percentage points from 2020 growth.

“Unfortunately we have moved in this direction of more dire scenarios,” Ms Georgieva told a news conference in Washington on Wednesday, declining to say whether the virus crisis could push the world into a recession. “Growth this year will fall below the level of last year.”

As governments and businesses internationally progress contingency plans to deal with the fast-spreading virus, the Financial Services Union called on financial services companies to exercise "flexibility" and not dock the pay of employees if they are forced to miss days if Covid-19 spreads beyond the current two confirmed cases in the Republic.

Loss of earnings

“Should staff miss work, having followed medical advice and guidance, they should not suffer any loss of earnings,” said FSU general secretary John O’Connell. “We are also calling for flexibility and common sense when it comes to childcare responsibilities, especially if we see further school closures.”

The Banking and Payments Federation Ireland (BPFI) said that the cross bank co-ordination group, which it chairs, continues to work on an industry-wide plan to best manage the continued provision of banking services in the event of an escalation of the coronavirus crisis.

“The group has focused on core payment services, assessing the possible impact to customers in the event of an escalation of the situation. Services that the group is looking at include cash distribution, paper clearing, card payments, electronic payments such as credit transfers and direct debits, ” the BPFI chief executive said.

AIB, the country's largest mortgage lender, said it was monitoring and scenario-planning for the potential impact of Covid-19.

“We have communicated best practice recommendations to our staff and we are putting protections in place to minimise any potential impact on our customers and our staff,” a spokesman said. “We are following the recommendations of the relevant authorities and are advising staff to avoid non-essential travel to affected areas.”

Bank of Ireland has contingency plans for a range of potential scenarios and is keeping them under review, a spokesman said. – Additional reporting: agencies