Now that the IMF has said it, it is definitely official: the world has effectively entered a recessionary period, after almost a decade of healthy growth, primarily because of the slowdown induced by the coronavirus. And this one is, according to the Fund’s initial projections, going to be steeper than the recessionary cycle that began in 2008-09. No matter how much certain circles expected this news to be delivered sooner or later, it is still quite a jolt to the world economy. Now this news item alone will assume a life cycle of its own as well, with markets reacting even more wildly than recent weeks. It’s no surprise also that the poorest countries are most vulnerable and therefore at risk of actually not surviving this recession. Though the world has seen some deep and protracted economic cycles, and one only recently, this one will still be of a different nature. According to IMF chief Kristalina Georgieva more than 80 countries, mostly poor ones, have requested emergency aid from the Fund. And, especially till much of the world is locked down so the virus doesn’t spread at least, it will be crucial that economies keep running or there will be precious little to write home about very soon even if a cure to the virus is found. That is why the IMF has already acknowledged that this recession will require a lot of funding just to keep developing nations economically alive. It goes without saying that Pakistan is among the countries that will require more than a little help to keep their Balance of Payments (BoP) positions under control. Already the economy was in pretty bad shape. And if hadn’t been for the Extended Fund Facility (EFF) signed with the Fund only recently, the country would definitely have been on its way to default by now. Yet it is heartening that IMF has announced that it would consider Islamabad’s request for assistance under its Rapid Financing Instrument (RFI) arrangement for budgetary support. No doubt we will also have to work with all lenders to soften some of their repayment regimes and, especially with the IMF, we will need a downward revision of some important targets. The coronavirus threat has reached an important crossroad. Not only is the world still without a vaccine, which means the shutdown is still indefinite, but now the global economy is also slowing. If a solution is not found soon, there will be yet more damage. Hopefully enough liquidity will be assured, especially in the near term, to deal effectively with this recession. *