## Foreword

## Source details

**Canonical URL:** [Foreword](https://www.imf.org/-/media/files/publications/fiscal-monitor/2021/april/english/foreword.pdf)

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### Pandemic impact
- "One year into the COVID-19 pandemic, lives lost are approaching three million people and the number of new daily cases is still elevated, at about half mil-lion."
- Consequences listed: "Lockdowns, losses of employment and income, setbacks in the education of children, disruptions to routine health services, reversals in the downward trends of poverty, and food deprivation."
- Disproportionate effects on: "poor people, youth, women, minorities, and workers without a college degree or in low-paying jobs."

### Fiscal response: speed, scale, and effects
- "In the last twelve months, countries have announced $16 trillion in fiscal actions."
- Fiscal actions enabled health systems and provided "emergency lifelines to households and firms."
- Fiscal policy "has also mitigated the contraction in economic activity."
- Economic outcomes: "economic growth surprised, on the upside as 2020 unfolded, and growth forecasts for 2021 have been revised up as well."
- Vaccination progress: "Only 11 months passed from the release of the genomic sequence of the virus... and testing and manufacture of vaccines, culminating with the first shot in the arm of a 91-year-old British woman."
- At time of writing: "more than half a billion people have already been vaccinated."
- Potential fiscal gains from vaccination: "Even a narrow focus on tax revenues identifies potential gains in excess of $1 trillion for advanced economies alone over the medium term."
- Assessment: "Global vaccination may well be the public project with the highest return ever identified."

### Uncertainty and policy agility
- "At present, the evolution of COVID-19 and its fallout on economic and social developments remain highly uncertain."
- Policy guidance: "Policies must remain agile and respond flexibly as the situation may require."
- Trade-off guidance: "The balance between supporting people and firms, in the emergency, and facilitating a resilient, sustainable and inclusive growth through economic transformation should evolve and adapt to the evolution of COVID-19 and of its consequences."

### Legacies of the pandemic and fiscal priorities
- Scale and consequence: "The amount of fiscal support in 2020 was much larger than the historical norm for business cycle fluctuations."
- Justification: "That was appropriate because COVID-19 is a health emergency."
- Cost and debt implication: "But these measures were expensive and contributed to reaching historically high debt levels."
- Financing asymmetry: "In a context of historically low interest rates, countries with stronger buffers, better access to finance, or both were able to deploy larger fiscal support."
- Going-forward priorities:
  - "Rebuilding buffers and dealing with legacies is crucial for resilience in the event of further shocks."
  - "Medium-term frameworks and better targeting will be key for building fiscal space and better confronting trade-offs such as providing support now and providing insurance against future emergencies."
- Country specificity: "countries are in different stages of COVID-19, economic and labor market conditions differ, structural characteristics—including institutions—are distinct. Hence, fiscal policy must be tailored to country-specific circumstances."

### Inequality and the "A Fair Shot" theme
- Title linkage: "A Fair Shot is also the title of Chapter 2 of the Fiscal Monitor."
- Vaccination as investment: "giving everyone access to a COVID-19 vaccine shot may well be the best investment of all."
- Broader argument: "it is crucial to give everyone a fair shot at life success."
- Interaction with inequality: "Preexisting inequalities have amplified the adverse impact of the pandemic. And, in turn, COVID-19 has aggravated inequalities. A vicious cycle of inequality could morph into a social and political seismic crack."
- Policy prescriptions:
  - "tackling inequalities in access to basic public services—health care, education, social safety—and for strengthening redistributive policies."
  - "in many cases, require substantial increases in tax capacity and improvements in the efficiency of public spending."
  - "Such strong demands on the public sector require good government. And the first requirement of good government is transparent and accountable commitment to a fair shot for all."

*Vitor Gaspar, Director of the Fiscal Affairs Department*

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_Source: https://www.imf.org/-/media/files/publications/fiscal-monitor/2021/april/english/foreword.pdf_