Post-COVID recovery to be partial and uneven in 2021, says IMF

July 18, 2020

WASHINGTON - Due to the continuing impact of the COVID-19 pandemic, the global economy faces a deep recession this year, with partial and uneven recovery expected in 2021, says Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF).

"While there remains great uncertainty on the outlook, the unprecedented actions taken by the G20 countries and others have helped to avert a much worse outcome," she said at the conclusion of the virtual meeting of the Group of 20 (G20) Finance Ministers and Central Bank Governors, chaired by Saudi Arabia.

 "As we enter the next phase of the crisis, further policy action will be required, as well as increased international co-operation," she said.

"The G20 Action Plan is key to this effort.

"To support countries in fighting the crisis and to prevent long-lasting scarring of the global economy--particularly waves of bankruptcies, risks to financial stability, high unemployment, and increasing inequality--I emphasise the following:

"First, the public health response remains the main priority to protect people, jobs, and economic activity. These lifelines should be maintained as needed and, in some cases, expanded.

"Second, supportive fiscal and monetary policies will need to continue until we can secure a safe and durable exit from the crisis. Premature withdrawal of this support could derail the recovery and incur larger costs.

"Third, policies need to prepare for and support transformational change, as some sectors may permanently shrink, while others--such as digital services--will expand. Adapting to change in an inclusive manner will require adequate social protection, and training and job search assistance to workers.

"I also emphasised that we can use the crisis as an opportunity to build a better future for all people by: maximizing the potential of the digital economy; promoting green investment to combat climate change in a job-rich manner; and investing in human capital to build a more inclusive economy.

In this context, we are stepping up action to make better use of existing Special Drawing Rights (SDRs).