Policy Advice to Asia in the COVID-19 Era

Departmental Papers, March 5, 2021

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Policy Advice to Asia in the COVID-19 Era

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Bibliographic details

• Authors: Chang Yong Rhee, Katsiaryna Svirydzenka
• Published: March 5, 2021
• Series: Departmental Papers
• DOI: https://doi.org/10.5089/9781513566597.087

Core summary

• The Asia-Pacific region was the first to be hit by the COVID-19 pandemic; it put a strain on its people and economies, and policymaking became exceptionally difficult.
• This departmental paper contains the assessment of the key challenges facing Asia at this critical juncture and policy advice to the region both to address the current challenges and to build the foundations for a more sustainable and inclusive future.
• The paper focuses on four main areas:
  • (1) adjusting to the COVID-19 shock,
  • (2) using unconventional policies when policy space is limited,
  • (3) dealing with debt, and
  • (4) helping the vulnerable and greening the recovery.
• The paper first presents the different ways countries are adjusting to the COVID-19 shock.

Major themes and findings

• Adjusting to the COVID-19 shock:
  • Assessment of heterogeneous country responses and adjustment paths across Asia.
• Using unconventional policies when policy space is limited:
  • Discussion of policy options beyond conventional monetary and fiscal measures for countries with constrained policy space.
• Dealing with debt:
  • Analysis of rising public debt pressures and implications for sovereign debt management.
• Helping the vulnerable and greening the recovery:
  • Policy advice aimed at protecting vulnerable populations and promoting a green, inclusive recovery.

Policy recommendations (high-level)

• Tailor adjustment strategies to country-specific pandemic impacts and constraints.
• Deploy unconventional policy tools where conventional policy space is limited, with attention to financial stability and market functioning.
• Address public debt challenges through prudent debt management and growth-supporting policies.
• Prioritize measures that protect vulnerable groups and incorporate green policies into recovery plans.

Subjects and keywords

• Subject: Central bank policy rate, COVID-19, Financial institutions, Financial services, Health, Monetary policy, Public debt, Sovereign bonds, Sovereign debt, Yield curve
• Keywords: Asia, Asia and Pacific, Australia and New Zealand, Central bank policy rate, containment measure, COVID-19, DP, DPPP, Global, illiquid firm, investment regression, nonfinancial firm, nonviable firm, Pacific Islands, Pandemic, Policy Advice, potential GDP, rising debt, sample firm, South Asia, Sovereign bonds, Yield curve

Policy Advice to Asia in the COVID-19 Era, Chang Yong Rhee and Katsiaryna Svirydzenka, March 5, 2021.

Content in this bundle

• Policy Advice to Asia in the COVID-19 Era; IMF Departmental Paper No. 21/04; March 2021
  • Policy Advice to Asia in the COVID-19 Era; IMF Departmental Paper No. 21/04; March 2021 (Markdown version)
  • Policy Advice to Asia in the COVID-19 Era; IMF Departmental Paper No. 21/04; March 2021 (PDF)