IMF chief warns global economic crisis 'far from over'
IMF chief Kristalina Georgieva has warned that a full recovery for the global economy is “unlikely” without a vaccine for the coronavirus.
In a column co-authored with IMF chief economist Gita Gopinath, Georgieva warned that the crisis might cause further bankruptcies and unemployment, urging governments to continue their support of workers and businesses.
Lockdowns have eased and there has been a "sharp rebound of output, consumption and employment," they said in Foreign Policy magazine, adding, “this crisis, however, is far from over."
“The recovery remains very fragile and uneven across regions and sectors. To ensure that the recovery continues, it is essential that support not be prematurely withdrawn.”
They argued that businesses, even insolvent firms, will continue to need help to prevent destruction of millions of jobs.
But they also warned that governments need to be cautious about the way they distribute their scarce resources, noting, some companies are expected to fail, especially in industries like travel that are unlikely to survive or will be curtailed in a post-pandemic world.
Speaking to the World Economic Forum, Georgieva said Wednesday that rapid government action "put a floor under the world economy," which helped everyone without "differentiating between... winners and losers."
She went on to say that policymakers will need to make wise investments in areas that have the greatest benefit which include green jobs like training workers to make buildings more energy efficient – and "accelerating digital transformation" but in a way that will minimize inequalities.
"In other words, support programs that take the countries towards growth that is green, smart and inclusive," the IMF chief said.
Nevertheless, the two writers cautioned in the essay that "Though the world has learned to live with the virus, a full recovery is unlikely without a permanent medical solution."
There are currently 128 coronavirus vaccines currently under development, they said, noting there might be a solution, but again, they added, "we must urgently devise multilateral solutions" to ensure adequate supply and distribution.
So far, over 28,029,000 have been infected with the virus and more than 908,000 have died globally.
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