“We Must Take the Right Actions Now!”—Opening Remarks for Annual Meetings Press Conference
IMF News, October 14, 2020
Source details
- Canonical URL
- “We Must Take the Right Actions Now!”—Opening Remarks for Annual Meetings Press Conference
Other formats
Bibliographic details
- Authors: Kristalina Georgieva
- Published: October 14, 2020
Introduction and outlook
- Nine months into the pandemic, the crisis has taken more than a million lives, driven the economy into reverse, caused sharply higher unemployment, rising poverty, and the risk of “a lost generation” in low-income countries.
- The IMF projects the worst global recession since the Great Depression:
- Growth is expected to fall to -4.4 percent this year.
- Over the next five years, the crisis could cost an estimated $28 trillion in output losses.
- Signs of stabilization and hope:
- Unprecedented efforts in vaccine development and treatment.
- Extraordinary and coordinated fiscal and monetary measures putting a floor under the world economy.
- The world is starting to learn how to live with the virus.
- Forecast uncertainty and near-term outlook:
- A partial and uneven recovery is projected in 2021, with growth expected at 5.2 percent.
- All countries face a “Long Ascent”—a journey that will be difficult, uneven, uncertain, and prone to setbacks.
Policy recommendations (Global Policy Agenda priorities)
- (1) Continue with essential measures to protect lives and livelihoods:
- Stepping up vital health measures is imperative.
- Maintain fiscal and monetary support to households and firms.
- Lifelines such as credit guarantees and wage subsidies are likely to remain critical for some time to ensure economic and financial stability.
- Warning: “Pull the plug too early, and you risk serious, self-inflicted harm.”
- (2) Build a more resilient and inclusive economy:
- New research shows public investment—especially in green projects and digital infrastructure—can be a game changer.
- Public investment has the potential to create millions of new jobs, while boosting productivity and incomes.
- Support workers as they transition to new jobs; focus on women and young people who have been disproportionately affected by the crisis.
- (3) Deal with debt:
- Global public debt is projected to reach a record high of 100 percent of GDP in 2021.
- Countries need to boost spending to fight the crisis and secure the recovery; addressing debt over the medium-term will be critical.
- For many low-income countries, urgent action is required now: they need access to more grants, concessional credit, and debt relief.
- International cooperation:
- More than ever, strong international cooperation is needed—especially on vaccine development and distribution.
- Faster progress on medical solutions could add almost $9 trillion to global income by 2025 and help narrow the income gap between poorer and richer nations.
The role of the IMF and recent actions
- Since the pandemic began, the IMF has pursued policy advice, capacity development, and financial resources:
- The IMF has reached over $280 billion in lending commitments—more than a third of that approved since March.
- The IMF still has substantial resources from its $1 trillion lending capacity to help support members.
- The IMF has provided financing to 81 countries.
- The IMF has extended debt service relief for its poorest members.
- The IMF has mobilized an additional $21 billion to support lending on concessional, zero-interest, terms.
- The IMF is preparing to gear up for the next phase—support for the recovery—and is considering options to further adapt its lending toolkit.
Closing message
- The speech concludes with an exhortation to act boldly: quoting Fyodor Dostoevsky, “Only one thing matters—to be able to dare!”
- “We must dare to face our most daunting challenge together; we must dare to take the right actions now.”
By Kristalina Georgieva, IMF Managing Director. Washington, D.C. October 14, 2020.