IMF "Global Economic Recovery Weakens Due to COVID-19 Resurgence"

Uncertainty Rated Exceptionally High
Georgieva Emphasizes G20-Level Response

[Asia Economy New York=Correspondent Baek Jong-min] The International Monetary Fund (IMF) has warned that the global economic recovery is weakening due to the resurgence of the novel coronavirus disease (COVID-19).

Kristalina Georgieva, IMF Managing Director
Photo by Reuters Yonhap News

On the 19th (local time), the IMF expressed concerns in its report on the global economic situation that with the rapid spread of COVID-19 in Europe, the United States, and other regions, new restrictions on economic activities are being imposed, putting the recovery at risk and potentially causing the recovery to fail in the worst-case scenario.

The IMF stated, "Since June, global economic activity has been recovering, but there are signs that this momentum could be lost," diagnosing the situation as one of unusually high uncertainty and risk.

The IMF urged governments and central banks not to withdraw policy support prematurely.

It added that nearly $12 trillion in fiscal spending and monetary policies have helped avoid worse outcomes, but poverty and inequality are increasing, and more support is needed.

IMF Managing Director Kristalina Georgieva also noted that many countries have begun to rebound from the COVID-19 crisis but said, "The resurgence of COVID-19 shows how difficult and uncertain this rebound is."

Georgieva appealed to ensure that sufficient vaccines are available worldwide and emphasized, "Recovery cannot be sustained unless COVID-19 is defeated."

She also assessed that overcoming the economic crisis remains challenging despite vaccine development. Georgieva stated, "Medical solutions are becoming visible, but the future economic path remains difficult and prone to setbacks," calling for the removal of trade barriers on medical technologies. This underscored the need for vaccine support for underdeveloped countries.

AFP reported that Georgieva’s remarks were interpreted as emphasizing the active involvement and solidarity of world leaders in responding to COVID-19 ahead of the upcoming Group of Twenty (G20) virtual summit next week.

In a draft joint statement prepared ahead of the G20 virtual meeting, the G20 countries acknowledged that "the recovery is uneven and highly uncertain, and downside risks such as virus resurgence in some economies may increase," and declared that they "will continue to use all available policy tools" to support economic recovery.

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