Given the unprecedented challenge posed by the COVID-19 pandemic, the discussants described how governments, central banks and multilateral institutions have been working together to ensure adequate and timely fiscal and monetary policy responses to protect lives and livelihoods, and stabilize the global economy and financial markets.
Key Points:
- State of Global Economy. Georgieva said the global economic growth for 2020, estimated at -4.4 percent, is an improvement from the estimates of three months ago, and growth will be positive next year largely reflecting unprecedented and synchronized policy support and better than expected developments in China. Lagarde noted that, different from most recessions, services and consumption had contributed significantly to the downturn, but fiscal and monetary measures have helped to stabilize the markets and the economy.
- Recovery and post-Pandemic Economy. Georgieva highlighted the post-pandemic economy shift to digitization provides an opportunity to build a greener, low-carbon, and climate resilient economy. Agreeing, Indrawati called for using the crisis to transform economy by focusing on gender and climate in the recovery efforts. Georgieva and Lagarde also urged countries to continue to use the fiscal space to support lives and livelihoods.
- COVID-19 Vaccine. Okonjo-Iweala hoped that a vaccine would be available by first quarter or the mid-year 2021, as the ACT had 8 vaccines in the third phase of trials. Georgieva shared that IMF staff had estimated that a coordinated global push for an accelerated and generalized vaccine would save about US$ 9 trillion by 2025.
- Multilateralism. The discussants emphasized that multilateralism and collective action has been and will remain the key in efforts to overcome the crisis. Georgieva stressed that emerging and low-income countries remain a priority and the Fund would continue to make the economic case for acting together. Lagarde noted that before the crisis no one would have believed that it would have been possible for 27 European countries to borrow jointly to provide grants to the most affected countries in Europe.
Quotes:
"Everything we can do to apply measures to reduce the impact of pandemic…we must do." Kristalina Georgieva
"We better make sure that all the arsenal that we have available is actually dealing with the situation by adopting the right policies." Christine Lagarde
"If people in developing and poor countries are not safe, nobody in developed countries is safe as well." Ngozi Okonjo-Iweala
Contributor: Smita Aggarwal
