Green shoots of recovery coming, IMF chief says
14 November, 2020
Governments all over the world should be cautious with withdrawing fiscal and monetary policy support “prematurely”, according to the head of the International Monetary Fund.
“We should be determined to underpin the road to recovery with continuous strong policy actions. Usually do not withdraw fiscal policy support and monetary policy support prematurely,” Kristalina Georgieva told the Caixin Summit.
The Washington-based multilateral lender has forecast the global economy to contract 4.4 % this year because of the monetary fallout over the coronavirus pandemic. The IMF sees the world economy rebounding to 5.2 % in 2021.
The IMF chief said the year 2020 presented the largest challenge to the world economy because the Second World War and Great Depression.
"As a result of the decisive action of governments and central banks, we managed to put a floor under the world economy. And we are seeing the green shoots of recovery,” she told the audience.
She cautioned that the street to recovery may very well be difficult and would require “determined collective action” for world governments, with tackling the health crisis set to dominate agendas.
"We cannot possibly achieve a sustainable recovery unless we've a durable exit from medical crisis,” she said.
"Which means taking action to safeguard people from the virus while it is still around - & most importantly taking action to have vaccines and treatment and ensure that they can be found everywhere,” she added.
The novel coronavirus has up to now infected a lot more than 53 million persons worldwide. Around 1.2 million persons succumbed to the virus by Friday, according to Worldometers, which tracks the pandemic
The outlook for the global economy turned optimistic the other day when American pharmaceuticals company Pfizer and Germany’s BioNTech said that their vaccine trial proved 90 % effective against the coronavirus.
However, the vaccine has delicate storage requirements and needs to be maintained at minus 75 degrees Celsius, which is colder than any other vaccine. The handling and storage of the vaccine will prove challenging in developing countries.
The IMF’s former head and current European Central Bank president, Christine Lagarde said within an address on Wednesday that the pandemic had created “a big river of uncertainty”.
As the election of Joe Biden as President of the United States and progress over Brexit talks removed several layers of uncertainty, the ECB president remained worried about new, mutated types of the virus.
Last week, Denmark detected a mutated kind of the coronavirus in mink and plans to cull the complete population to stop the spread of the virus.
The cull of nearly all of the Scandinavian state's mink population was to defend against concerns of the mutated virus spreading more virulently among humans, denting vaccine efficacy.
In her address to the Caixin Summit, Ms Georgieva also highlighted the need for a sustainable recovery.
She recommended investments in education, health, social protection aswell as in enabling greener transition in global economies.
"Public investments that are going to be put set up in the months and years ahead should pursue, first, investment in people," she said.
"Second, investment in green infrastructure - ensuring we can create a low-carbon, climate-resilient economy for tomorrow," she addded.
Source: www.thenationalnews.com
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