{
  "title": "Event of the Finance Ministers on Financing for Development in the Era of COVID-19 and Beyond",
  "publication": "IMF News, September 8, 2020",
  "sourceUrl": "https://www.imf.org/en/news/articles/2020/09/08/sp090820-event-of-the-finance-ministers-on-financing-for-development",
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  "summary": "Incoming data since end of May paints a picture that is less bleak; signs of recovery in the world economy.",
  "authors": [
    "Kristalina Georgieva"
  ],
  "publishDate": "2020-09-08",
  "sections": [
    {
      "heading": "Outlook for the world economy",
      "content": "- Incoming data since end of May paints a picture that is less bleak; signs of recovery in the world economy.\n- Advanced economies: outlook somewhat less bad than anticipated.\n- China: \"has turned the corner and is recovering a little faster than anticipated.\"\n- Drivers of the relatively improved outlook:\n  - A very strong and synchronized policy response by finance ministries and by central banks.\n  - \"A massive policy response put a floor under the world economy.\" This included $11 trillion of fiscal measures.\n  - Central banks injected large amounts of liquidity and supported national economies and, through spillovers, the economies of other countries.\n  - It has become easier for emerging market countries with good fundamentals to raise money.\n  - Behavioral adaptation to the pandemic: mask wearing, social distancing, protocols enabling some rebounds.\n  - Non-contact-dependent activities like manufacturing are doing somewhat better than expected.\n  - Improved results in testing and treatment and hope for a vaccine (described as \"on the more optimistic side\").\n- Divergences and vulnerabilities:\n  - Majority of emerging markets and developing countries—excluding China—are not seeing a reversal of fortunes; some may face downgrades in projections.\n  - Small tourism-dependent countries described as \"on their knees.\"\n  - Countries with high debt levels are \"in terrible trouble.\"\n  - The virus is spreading to places with weaker health systems.\n- Aggregate loss estimate:\n  - \"We are at a point when we can say that the world economy will lose $12 trillion this year and next year.\""
    },
    {
      "heading": "IMF response and financing",
      "content": "- IMF actions:\n  - Supported over 80 countries through emergency financing and through regular lending programs.\n  - \"We have now extended support of $270 billion – out of the Fund’s $1 trillion capacity – and more than a third of this support has been provided in recent months.\"\n  - Never in IMF history has it \"done so much so quickly.\"\n- Policy implication for supporting economies:\n  - Continued support is required until the economy turns around; the projected recovery is \"only partial and uneven.\"\n  - Advanced economies can continue support more easily due to low interest rates making it more affordable.\n  - For developing economies and emerging markets with weaker fundamentals, there is a need to boost available financing collectively.\n  - IMF emphasis on expanding the use of existing SDRs, encouraging a shift from advanced economies towards developing economies to allow reliance on IMF financing on concessional terms."
    },
    {
      "heading": "Debt, debt relief, and transparency",
      "content": "- Debt concerns:\n  - Debt levels are high in many emerging and developing economies—\"high to a point of suffocating capacity to act.\"\n- Debt Service Suspension Initiative (DSSI):\n  - Described as \"a great achievement.\"\n  - IMF and World Bank \"are calling for a one-year extension.\"\n  - Call for greater private sector participation in the Initiative.\n- Restructuring and transparency:\n  - Recognition that for some countries the DSSI will not be enough and \"some countries will need a restructuring to bring debt down to a sustainable level.\"\n  - Strong call for debt transparency: \"If we know debt levels, then this issue is much easier to handle.\""
    },
    {
      "heading": "Building resilience for the future — policy priorities",
      "content": "- Three main priorities summarized:\n  1. Maintain support until recovery is secured (see financing measures above).\n  2. Address unsustainable debt and ensure debt transparency, extend DSSI, and increase private creditor participation; provide restructurings where necessary.\n  3. Build resilience through investment and reforms.\n- Areas for resilience-building investment:\n  - Education\n  - Digital capacity and human capital\n  - Health systems\n  - Social protection systems\n  - Integrate and address the climate crisis\n  - Prevent rising inequality and poverty, including gender inequality\n- Fiscal policy and taxation:\n  - \"We have to take care of taxation in a way that transforms and builds resilience for the future.\"\n- Political and reform context:\n  - Acknowledgement that reforms will be hard politically.\n  - Historical analogy: after the global financial crisis, resilience was built in the banking sector through reform; now similar holistic resilience-building is required for economies as a whole.\n\nBy Kristalina Georgieva, IMF Managing Director; Washington, DC; September 8, 2020.\n\n---\n\n\n References\n\n- https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva\n- People's Republic of China and the IMF\n- Jamaica and the IMF\n- Speeches\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2020/09/08/sp090820-event-of-the-finance-ministers-on-financing-for-development"
    }
  ],
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    "Authors: Kristalina Georgieva",
    "Published: September 8, 2020",
    "Incoming data since end of May paints a picture that is less bleak; signs of recovery in the world economy.",
    "Advanced economies: outlook somewhat less bad than anticipated.",
    "China: \"has turned the corner and is recovering a little faster than anticipated.\"",
    "Drivers of the relatively improved outlook:",
    "Divergences and vulnerabilities:",
    "Aggregate loss estimate:",
    "IMF actions:",
    "Policy implication for supporting economies:",
    "Debt concerns:",
    "Debt Service Suspension Initiative (DSSI):",
    "Restructuring and transparency:",
    "Three main priorities summarized:",
    "Areas for resilience-building investment:",
    "Fiscal policy and taxation:",
    "Political and reform context:",
    "[https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva](https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva)",
    "[People's Republic of China and the IMF](http://www.imf.org/external/country/CHN/index.htm)",
    "[Jamaica and the IMF](http://www.imf.org/external/country/JAM/index.htm)",
    "[Speeches](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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