Development Committee: The Managing Director's Written Statement October 2020

Policy Papers, October 16, 2020

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The global economy is embarking on a lengthy path to recovery with modest growth expected for 2021, after a severe contraction this year.
The global forecast is subject to unusually large risks.
Emerging markets and developing economies face an uphill battle.
Low-income developing countries are in an especially vulnerable position and risk a persistent and significant deterioration in development prospects.
Controlling the pandemic and cushioning the impact on the economy are key.

The global economy: lengthy path to recovery; modest growth expected for 2021 following a severe contraction in 2020.
Forecast risks: unusually large downside and uncertainty surrounding the global forecast.
Emerging markets and developing economies (EMDEs): face an uphill battle to recover.
Low-income developing countries (LIDCs): especially vulnerable, risk persistent and significant deterioration in development prospects.
Policy emphasis: controlling the pandemic and cushioning economic impact are critical priorities.

LIDCs should adopt targeted containment measures.
LIDCs should strictly prioritize spending.
LIDCs should refrain from policies that could create long term damage.
Multilateral cooperation and extensive support from the international community are indispensable.
Targeted surveillance and capacity development will tackle new policy challenges and react nimbly to the needs of the membership including fragile and small states.

The IMF has helped EMDEs through emergency lending and debt service relief.
The IMF will provide targeted surveillance and capacity development to address new policy challenges and support fragile and small states.

Subjects: Asset and liability management, COVID-19, Debt burden, Debt relief, Debt service, Debt sustainability, Emerging and frontier financial markets, External debt, Financial markets, Health
Keywords: capacity development, COVID-19, Debt burden, Debt relief, Debt sustainability, Emerging and frontier financial markets, Global, health crisis, IMF support, IMF surveillance, IMF-World Bank debt sustainability assessment, international community, lending toolkit, Policy decision, policy response, PP, world economy