Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), has said the crisis caused by the coronavirus pandemic would lead to a USD 28 trillion drop in global production over the next five years.
“Nine months into the pandemic, we are still struggling with the darkness of a crisis that has taken more than a million lives, and driven the economy into reverse, causing sharply higher unemployment, rising poverty, and the risk of “a lost generation” in low-income countries. The picture over the last few months has become less dire, yet we continue to project the worst global recession since the Great Depression. And over the next five years, the crisis could cost an estimated USD 28 trillion in output losses,” Kristalina Georgieva said, stressing that according to IMF forecasts, growth is expected to fall to -4.4% this year.
At the same time, the IMF managing director is convinced that “we can see stars shining above us.”
“We see unprecedented efforts in vaccine development and treatment. And the world is starting to learn how to live with the virus. While there is tremendous uncertainty around our forecast, we project a partial and uneven recovery in 2021, with growth expected at 5.2%,” Kristalina Georgieva said.
Among the measures necessary to overcome the crisis, Georgieva noted the fight against the pandemic itself, the provision of financial support and tax deductions to households and companies, the creation of a more sustainable and inclusive economy, and the solution of problems associated with public debt.
“Global public debt is projected to reach a record high of 100% of GDP in 2021. This is partly because countries need to boost spending to fight the crisis and secure the recovery. Addressing this issue over the medium-term will be critical,” the IMF chief stressed, adding that the Fund has “USD 1 trillion lending capacity to help support our members.”
“We have mobilized an additional USD 21 billion to support lending on concessional terms, without interest. And we are considering options for further adapting our set of lending tools,” Kristalina Georgieva summed up.
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