Imf Chief Warns Global Economic Crisis Far From Over



(AFP) – The global economy is showing signs of bouncing back from the severe downturn caused by the global coronavirus pandemic, but a full recovery is “unlikely” without a vaccine, IMF chief Kristalina Georgieva said today.
In a column co-authored with IMF chief economist Gita Gopinath, the officials stressed that governments should continue to support workers and businesses since the unprecedented nature of the crisis could give rise to a wave of bankruptcies and job destruction.
As lockdowns have eased and businesses around the world have been allowed to reopen, there has been a “sharp rebound of output, consumption and employment,” they said in Foreign Policy magazine.
The massive scale and speed of government support has helped cushion the blow and allowed for 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 To ensure that the recovery continues, it is essential that support not be prematurely withdrawn.”
Businesses, even insolvent firms, will need continued help to prevent destruction of millions of jobs. That could include governments taking equity in firms or providing grants in exchange for higher tax rates later, they said.
But governments will have to be cautious in how they distribute their scarce resources, and some companies will inevitably fail, especially in industries like travel that may not survive or will be curtailed in a post-pandemic world.
And, “Though the world has learned to live with the virus, a full recovery is unlikely without a permanent medical solution.”
With 128 coronavirus vaccines currently under development, there is a strong chance a solution will be found, but “we must urgently devise multilateral solutions” to ensure adequate supply and distribution, Georgieva and Gopinath wrote.
 


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