Recovery underway after worst global recession since WWII: IMF chief

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Washington:

A day after the International Monetary Fund forecast global growth of 6% for this year, IMF Managing Director Kristalina Georgieva said that after the worst global recession since World War II, the recovery was underway.

The outlook, she said, is brighter because millions of people are receiving vaccinations and thanks to additional political support, especially in the United States.

Ms Georgieva said this was in addition to the exceptional and coordinated actions taken over the past year.

“Without them, without these fiscal and monetary measures, last year’s global contraction would have been three times worse. It could have been another great depression,” she noted.

“We have good news: there is light at the end of the tunnel. After the worst global recession since World War II, the recovery is underway. As you know, yesterday we raised our global growth forecast to 6% for this. year, 4.4% for 2022, ”Georgieva told reporters at the start of the IMF-World Bank’s annual spring meeting on Wednesday.

Yet, as long as there is light, the crisis continues to cast a dark shadow. Economic fortunes diverge dangerously. A small number of advanced and emerging market economies, led by the United States and China, are advancing. Weaker and poorer countries are falling behind in this multi-speed recovery, she said.

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“We also face extremely high uncertainty, particularly regarding the impact of new virus strains and potential changes in financial conditions. And, there is the risk of further economic scars from job losses, learning losses, bankruptcies, extreme poverty, hunger. the good deeds now by giving everyone a fair chance – not only in the arms of the people, but also in the lives of the people and the vulnerable ” , said the Managing Director of the IMF.

The Global Policy Agenda released by the IMF, she said, focuses on three things: a fair chance for the vaccine, a good chance of recovery and a fair view to the future.

“This is perhaps the most important decision a government can make this year. The focus should be on increasing public investment in green projects and digital infrastructure, in health and education. people, to ensure that everyone can benefit from the transformation towards greener, smarter and more inclusive economies, ”she argued.

“To unlock this potential, countries will need sufficient government revenue, and they will need more efficient spending. In many cases, this will mean more progressive taxation and agreement on issues such as minimum business taxation and international tax rights. coupled with stronger support for poorer countries as they fight the crisis and seek to invest in the future, ”Georgieva said.

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She said the IMF will propose a new Special Drawing Rights (SDR) allocation of USD 650 billion.

This will help meet the long-term global need for reserve assets and provide a substantial increase in liquidity to all of our members, especially the most vulnerable. What this crisis has shown us is how inevitable our common destiny is. Now we need to build on this broader sense of shared responsibility to foster a fair recovery and a resilient post-pandemic world, ”she said.

Responding to a question, Georgieva said after the global financial crisis, the most important lesson the world learned was that we need to build the resilience of the banking system.

“And we did. After this crisis, our understanding of the importance of working together to build resilience to future shocks is certainly much deeper, and it is this concentration within communities, countries and at the level. international, on strengthening people’s resilience, investing in education, health, social protection, strengthening the resilience of our planet, ”she said.

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Georgieva said many of us fear the pandemic will allay concerns about this other crisis, the climate crisis.

“That did not happen. On the contrary, we understand much better this interdependence and also our dependence on nature,” she added.

“With a more global resilience of the economy dating back even to the global financial crisis, we now recognize that we have been working on the banking system but not on nonbank financial institutions, and we see that we need to extend this resilience building further. . largely to them too, ”she said.

Georgieva said she believes this is a change that we all need to incorporate into our thinking and hopefully it would help us to be much more proactive as a global community, as a country. , as businesses and families, to this more resilient world.

“It is no coincidence that we all recognize that digitization, climate resilience, the transition to the new climate economy, greater attention to equality, these are lessons that we are taking with us”, a- she declared.

(This story was not edited by The Bharat Express News on Social Platforms.)

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