The global economy is recovering from the crisis faster than expected last October, thanks to an unprecedented policy response and rapid progress in vaccine development, announced IMFC Chair Minister Magdalena Andersson in her first IMFC press conference as the new Chair with IMF Managing Director Kristalina Georgieva today (Thursday April 8th).
But despite the upward looking forecast, Minister Andersson expressed her concern over the highly uncertain and uneven prospects for recovery within and across countries due to varying policy space, different economic structures and rigidities, preexisting vulnerabilities, and uneven access to vaccines.
“The message today from the IMFC is that all vulnerable countries exposed in the pandemic and its economic fallout deserve particular attention and the broad membership of the IMF is promoting comprehensive action to help them meet their critical financing and health needs. One last point is that the IMFC agreed to strengthen multilateral cooperation further to ensure a sustainable, inclusive, and resilient global economy. And we also expressed our support of the IMF in stepping up its work to help members identify and match and manage macro critical implications of climate change and other areas such as digitalization, inequality, and fragility,” said Andersson.
IMF Managing Director Georgieva stressed how crucial 2021 is for IMF member countries as they transition from crisis to recovery, and then mitigate and heal the economic scars. She also added that now is the time to seize opportunities for structural transformation.
“We recognize that the global economy is on a firmer footing, but we continue to face many challenges, many of which can only be met through stronger international cooperation. I am very encouraged by our meeting. The IMFC support for multilateral approaches to strengthen the global economy and for the fund's agenda going forward. This includes our continued crisis response, the forthcoming proposal for a new allocation of Special Drawing Rights and work on the macro critical aspects of climate change and digitalization,” said Georgieva
Since the start of the pandemic the IMF has provided critical new financing tools to a record number of member countries as well as debt service relief. And as countries move forward, Georgieva stressed that the IMF will ensure that the lending tools and policy advice will offer the best possible support to help vulnerable member countries navigate this difficult road especially with the proposed $650 billion Special Drawing Rights allocation that is on the way.
“ Let me add a word on the proposed $650 billion SDR allocation. A number of members in the discussion called it historic, and it is. This is the largest boost of reserves that our membership is giving us a mandate to follow on. It would provide substantial liquidity boost to all our members, especially the most vulnerable. We will step up transparency, and it is for the sake of good governance for everybody. And the innovation that we are pursuing is for some of our better off members to be able to allocate their SDRs for the common purpose of bringing the more vulnerable members to a more sound to a sound position. We need a recovery that works for all,” said Georgieva.
To watch the full press briefing, click here