Kristalina Georgieva said the global economy is showing signs of a rebound (File)
Washington, United States:
The global economy is showing signs of rebounding from the severe recession caused by the global coronavirus pandemic, but a full recovery is “unlikely” without a vaccine, IMF chief Kristalina Georgieva said on Wednesday.
In a column co-authored with IMF Chief Economist Gita Gopinath, officials stressed that governments should continue to support workers and businesses as the unprecedented nature of the crisis could lead to a wave of bankruptcies and job cuts.
As lockdowns eased and businesses around the world were allowed to reopen, there has been “a strong rebound in production, consumption and employment,” they told Foreign magazine. Policy.
The massive scale and speed of government support helped cushion the blow and enabled the initial rebound, Gopinath and Georgieva wrote.
“This crisis, however, is far from over,” they said. “The recovery remains very fragile and uneven across regions and sectors. To ensure the recovery continues, it is essential that aid is not withdrawn prematurely.”
Businesses, even insolvent businesses, will need continued help to avoid the destruction of millions of jobs. This could include governments taking stakes in companies or giving grants in exchange for higher tax rates later, they said.
But governments will need to be careful how they distribute their scarce resources, and some businesses will inevitably fail, especially in areas like travel that may not survive or will be reduced in a post-pandemic world.
In a speech to the World Economic Forum on Wednesday, Georgieva said swift government action “has put a floor under the global economy,” which has helped everyone without “distinguishing between … winners and losers “.
Going forward, policymakers will need to invest wisely in areas with the greatest benefits, including green jobs – such as training workers to make buildings more energy efficient – and ‘accelerating digital transformation’ so as to reduce inequalities, she said. .
“In other words, supporting programs that lead countries towards smart and inclusive green growth,” said the IMF chief.
But fund officials in their essay warned that “although the world has learned to live with the virus, a full recovery is unlikely without a permanent medical solution.”
With 128 coronavirus vaccines currently in development, there is a good chance that a solution will be found, but “we urgently need to devise multilateral solutions” to ensure adequate supply and distribution, Georgieva wrote and Gopinath.
(This story was not edited by GalacticGaming staff and is auto-generated from a syndicated feed.)
