The International Monetary Fund's managing director Kristalina Georgieva said that the UK should ask for an extension for its post-Brexit transition period, given the increased uncertainty and the worsening economic situation.
“It is tough as it is. Let’s not make it any tougher,” said Georgieva during an interview with the BBC, “My advice would be to seek ways in which this element of uncertainty is reduced in the interests of everybody, of the UK, of the EU, the whole world," she continued.
Recently the EU and the UK agreed to hold a three-stage round of trade talks, which is expected to take place on 20 April, 11 May, and 1 June. Both teams aim for agreeing in a deal by December 2020.
"I'm confident that that work can continue and hopefully reach a satisfactory conclusion, but we remain committed to the timeline that we set out," said the UK's chancellor Rishi Sunak after expressing the UK government's wishes for reaching a deal by the end of the year.
The UK has currently 78,991 confirmed infected individuals and a death toll of 9,875. According to some experts, the shutdown that the government imposed due to the coronavirus crisis could shrink the gross domestic product by 13 percent this year, which would be its deepest recession in 300 years.
By 7:40 the Pound Sterling went down by 0.19 percent against the US dollar, falling to the 1.9825 level. Conversely, it went down against the Australian dollar losing 0.12 percent and falling to the 1.9825 level. On the other hand, it added 0.09 percent against the Japanese Yen, hitting the 134.62 level.
World Economy May Face a Double Recession
According to the Economist Intelligence Unit the world is already facing an economic downturn that is worse than the great depression, and that this downturn could be followed by a much worse downturn caused by a debt crisis that would be suffered by the governments with the weakest balance sheets.
“Many of the European countries that are among the worst affected by the pandemic, such as Italy and Spain, already had weak fiscal positions before the outbreak,” said the EIU's global forecasting director, “A potential debt crisis in any of these countries would quickly spread to other developed countries and emerging markets, sending the global economy into another - possibly much worse - downturn,” she added.
They also added that the recovery would only be gradual since the different countries will lift the lockdowns at different times.
“The recovery in the global economy will only be gradual, all the more so as countries will lift lockdowns at different points in time, " she added.