Recovery is underway after the worst global recession since World War II: IMF chief

Washington:

A day after the International Monetary Fund estimated six percent of global growth for this year, IMF managing director Kristalina Georgieva has said that after the worst global recession since World War II, recovery is underway.

The approach he emphasized is bright because millions of people are benefiting from vaccination, and especially because of policy support in the US.

Ms Georgieva said that it is connecting with the extraordinary and coordinated actions taken in the last year.

“Without them, without those fiscal and monetary measures, the global contraction had tripled last year. It could be another great depression,” she said.

“We have a good news that there is light at the end of the tunnel. After the worst global recession since World War II, recovery is underway. As you know, yesterday we raised our global growth forecast for it to 6 percent. Georgiva told reporters at the beginning of the annual Spring Meeting of the IMF and World Bank on Wednesday, 4.4 percent for 2022.

Nevertheless, when there is light, the crisis remains a dark shadow. Economic fortunes are changing in a dangerous way. A large number of advanced and emerging market economies are headed by the US and China. Weak and poor countries are lagging behind in this multi-speed recovery.

“We face a lot of uncertainty, especially from the impact of new virus strains and possible changes in financial circumstances. And, there is a risk of further economic crisis from job loss, learning loss, bankruptcy, extreme poverty, hunger. Polimakers should be taken. The IMF MD said that giving everyone the right shot is likely to weaken not only in people’s arms, but also in people’s lives.

The Global Policy Agenda released by the IMF, she said, focused on three things: a good shot at the vaccine, a good shot at recovery and a fair shot at the future.

“This is probably the most consequential decision that any government can make this year. The focus should be on increasing public investment in people’s health and education, in green projects and in digital infrastructure to ensure that everyone has a historical benefit.” Could pick up. ” Change in greenery, smarter, more inclusive economy, ”she argued.

“To unlock this potential, countries will require substantial public revenue, and they will require more efficient spending. In many cases, this means more progressive taxation and minimal taxation for companies and international tax rights. The agreement will happen. Georgiwa said that they fight the crisis with strong support for poor countries and want to invest in the future.

He said that the IMF would propose a new Special Drawing Rights (SDR) allocation of US $ 650 billion.

“This will help address the long-term global need for reserve assets and provide adequate liquidity to all our members, particularly the most vulnerable. What this crisis has shown us is how inevitable our shared destiny is. Now, we should build on this. He said that the general responsibility for promoting a fair recovery and a resilient post-pandemic world has broad meaning.

In response to a question, Georgieva said that after the global financial crisis, the most important lesson the world learned was that we needed to increase the flexibility of the banking system.

“And we did it. After this crisis, our understanding of the importance of working together to create resilience for future shocks is certainly much deeper, and that is in communities, countries and internationally Investing in building resilience of people, in education, health, social protection, building resilience of our planet, ”she said.

Georgiwa said that many of us were worried that the epidemic would address concerns about this other crisis, the climate crisis.

He said, “It did not happen. On the contrary, we have a greater understanding of this interdependence and our dependence on nature.”

“A more widespread resilience of the economy is even going back to the global financial crisis, now we understand that we worked on the banking system, but not on non-banking financial institutions, and we are seeing that we This flexibility building will have to be expanded broadly towards them as well, ”she said.

Georgiwa said that she thinks this is a change that we all have to integrate into our thinking, and hopes to move towards this more resilient world, as a world community, as countries, businesses and families. As will help to be more active.

“It is not coincidentally that we all understand that digitalization, climate resilience, transition to a new climate economy, greater focus on equality, these are the lessons we are taking with us,” she said.

(This story is not edited by NDTV staff and auto-generated from a syndicated feed.)

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