Economic outlook remains hard and prone to setbacks — IMF's Georgieva

Cornelia Mascio
Novembre 21, 2020

"While a medical solution is now in sight, the economic path ahead remains hard and prone to setbacks", Georgieva said.

"Elevated asset valuations show disconnect of financial markets from the real economy, with inherent risks to financial stability".

"While global economic activity has picked up since June, there are signs that the recovery may be losing momentum, and the crisis is likely to leave deep, unequal scars", officials at the Washington-based fund said in a report published on Thursday.

The United Kingdom, Germany and France as well as parts of the US and Australia are among the countries with new curbs on movement and businesses to contain the pandemic's spread. Many risks remain, including the threat that new outbreaks may require more stringent shutdowns, she said. In this regard, we welcome the CBE's recent interest rate cuts to further support economic recovery amid muted inflation.

The final wording could still change after the virtual meeting. It previously began a rapid recovery in May that petered out at about 80% of its normal level in July.

"IMF has provided over $100 million in new financing to 82 countries during the crisis, aims to do more". "But the resurgence in infections in many economies shows just how hard and uncertain this ascent will be".

According to the International Monetary Fund, the measures of the National Bank and the Government in response to the Covid-19 pandemic and the sharp deterioration in external conditions were decisive and timely.

Georgieva said some economies have room for greater fiscal support next year beyond current budgets, and warned against cutting off lifelines such as expanded unemployment benefits.

It is important that governments avoid a premature withdrawal of economic support, Georgieva said. Should countries act alone, it would take about two-thirds more spending to achieve the same outcomes, she said.

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