The economic recovery of the world from the corona virus pandemic continues, but slowly, said today the executive director of the International Monetary Fund (IMF), Kristalina Georgieva, in an online speech at the video meeting of finance ministers and governors of G20 central banks.
International economic news sites reported that Georgieva reminded that three weeks ago, the IMF lowered its forecast for global growth to 4.4 percent, partly due to the revision of the assessment of growth prospects in the United States and China.
She stressed that since then, economic indicators have shown weaker growth dynamics in 2022 due to the emergence of a new variant of the omicron virus corona and supply chain disruptions that are longer lasting than expected. At the same time, inflation remains high in many countries, financial markets are more volatile, and geopolitical tensions have risen sharply.
“Strong international cooperation and extreme policy flexibility will be vital to overcoming the complex ‘2022 obstacle course,'” she said, focusing on three policy priorities.
First, efforts must be stepped up to combat what could be described as an “economically long-term COVID”. The IMF predicts that the economic losses from the pandemic will be almost 13.8 trillion (thousand billion) US dollars by the end of 2024, and the version of the Omicron corona virus reminds that continuous and inclusive recovery is impossible while the pandemic continues, Georgieva warned.
In such circumstances, she said, the best course of action is to ensure that, in addition to providing vaccines, every country has equal access to a comprehensive “KOVID-19 toolkit” containing tests and treatments.
Second, many countries will have to pursue tighter monetary policies. In the context of a high degree of uncertainty and significant differences between countries, macroeconomic policies must be carefully calibrated according to the circumstances of each country. The risk of potential externalities affecting emerging markets and developing countries should also be reduced. “We must fight inflation without disrupting the recovery,” the IMF chief said.
Third, states must give higher priority to fiscal sustainability. Urgent fiscal measures implemented during the crisis helped prevent another major recession. But they have also raised debt levels to record highs. “During 2020, we saw the largest increase in debt in the year since World War II, with global debt, both public and private, rising to $ 226 trillion,” Georgieva said.
She pointed out that while many countries are facing increasing debt, priority must be given to helping those countries that need debt restructuring. The share of low-income countries that are at high risk or already have debt problems has doubled since 2015 from 30 percent of the total to 60 percent today, and many face an urgent need to restructure debt, the chief said. IMF.