ANKARA – Faster progress on medical solutions against the Covid-19 pandemic could quicken the economic recovery countries, projected to add almost US$9 trillion to global income by 2025, the International Monetary Fund (IMF) said.
In a news conference following the recent annual meeting with the World Bank, IMF director Kristalina Georgieva said strong international cooperation on vaccine development and distribution is imperative,
“Nine months into the pandemic, we are still struggling with the darkness of a crisis that has taken more than a million lives,” she said.
Though the picture over the past few months has become less dire, the IMF continues to project the worst global recession since the Great Depression, Georgieva warned.
“Growth is expected to fall 4.4 percent this year and over the next five years, the crisis could cost an estimated US$28 trillion in output losses,” she said.
According to the IMF, there are three priorities that policymakers should take into account during the pandemic.
Underlining that essential measures to protect lives and livelihoods should continue, Georgieva said, “A durable economic recovery is only possible if we beat the pandemic everywhere.”
She said stepping up vital health measures would be as important as fiscal and monetary support to households and firms.
“These lifelines, such as credit guarantees and wage subsidies, are likely to remain critical for some time,” she added.
Secondly, Georgieva highlighted the need to build a more resilient and inclusive economy with public investments, especially in green projects and digital infrastructure, which could be game-changers.
“They have the potential to create millions of new jobs while boosting productivity and incomes,” she said.
Dealing with debt would be the third priority. Global public debt is projected to reach a record high of 100 percent of gross domestic product (GDP) in 2021.
“Addressing this issue over the medium term will be critical. For many low-income countries, however, urgent action is required now,” she said.
Given their heavy debt burdens, these countries are now struggling to maintain vital policy support, she added.
The global financial body reached more than US$280 billion in lending commitments – more than a third of that approved since March. (Anadolu)