International Monetary Fund
“A global crisis like no other needs a global response like no other”
Kristalina Giorgeva

Covid-19: Crisis or opportunity?

Kristalina Giorgeva, Managing Director of the International Monetary Fund (IMF), released this post at the “Global economy” blog of this organism, after the recent virtual Spring Meetings of the institution. 

  • This is a crisis like no other.” The IMF´s latest estimates show “global economic activity to decline on a scale we have not seen since the Great Depression”. To deal with this situation the response from governments and other public and private institutions has been “like no other: governments all over the world have taken unprecedented action to fight the pandemic, to protect their societies and economies. Fiscal measures so far have amounted to about $8 trillion and central banks have undertaken massive liquidity injections.”
  • In this context, she highlights the difficult situation of emerging markets and developing countries as they have experienced “the sharpest portfolio flow reversal on record, of about $100bn.” 
  • Looking forward she points out to some questions that will become very relevant in the recovery phase: “how long to maintain the extraordinary stimulus and unconventional policy measures, and how to unwind them; dealing with high unemployment and “lower-for-longer” interest rates; preserving financial stability; and, where needed, facilitating sectoral adjustment and private sector debt workouts
  • Finally she reminds us that along with the covid-19 crisis, there are other global challenges that will also require a "collective response", such as the climate change. This crisis can be transformed into a great opportunity for the future, if we take advantage of the fiscal stimulus needed to overcome covid-19 crisis to “craft a different and better future together”.

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