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Krisztalina Georgieva called on countries around the world to invest in green projects and digital infrastructure to increase productivity and income at a press conference that opened the virtual meeting of the International Monetary Fund and the World Bank this fall. He claimed
help low-income countries cope with heavy debt burdens,
so that they can continue to support their citizens.
It has improved in recent months so the situation is not so dire, but we still expect the world to be hit by a severe recession not seen since the Great Depression, Georgieva said, adding that the epidemic has taken more than a million lives in nine months. it has pushed the economy into crisis, dramatically increasing unemployment and poverty.
The currency fund expects a shallower global economic recession this year than in the previous forecast, but expects a prolonged and uneven improvement, therefore, it slowed down the expected growth rate for next year. In its forecast released Tuesday, the IMF forecast a 4.4 percent drop in global gross domestic product (GDP) for this year, but for growth of 5,221 by 2021.
Georgieva reiterated that the risks were significant, including the risk of massive spread of the coronavirus. Sustained economic recovery will only be possible if the epidemic is controlled worldwide, said the IMF chief, who called for strong international cooperation to develop and distribute an effective vaccine.
Faster progress in disease prevention and treatment could give a strong boost to economic recovery, increasing global revenues by nearly $ 9 trillion by 2025, which in turn could help reduce income disparities between countries poor and rich.
Georgieva considered it key that all countries continue to take basic measures to protect lives and livelihoods, including through instruments such as loan guarantees and wage subsidies. If these measures are implemented too soon, countries could cause serious harm to themselves, he said.
The IMF has a loan commitment of more than 280,000 million dollars, more than a third of which has been approved since March, after the outbreak of the crisis caused by the epidemic. The IMF has helped 81 countriesand it facilitated debt service for its poorest members. It has also mobilized an additional $ 21 billion from its member states to back soft loans with zero interest rates.
The financial leaders of the G20, which brings together the 19 largest economies in the world and the European Union, also highlighted the need to curb the coronavirus epidemic and vowed to “do whatever it takes” to support the global economy and financial stability. Their joint statement on Wednesday testified that, for the first time, finance ministers and central bankers agreed in principle on a joint framework program to address poor countries struggling with debt problems on a case-by-case basis.
G20 finance leaders also agreed to extend the debt repayment moratorium for six months in poor countries under constant liquidity pressure. However, they were disappointed that private creditors did not join the initiative to allow the suspension of repayments.
Cover image: Shutterstock
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