IMF said on Monday that though the recovery of the coronavirus is under way; the economic fallout from the pandemic would be remain for years.
“As of end-April 2021, loans have been approved to 86 countries of more than $110bn; a record number. But even though the recovery is under way, the economic fallout from the pandemic will be with us for years to come,” the IMF added in its annual report.
“More than a year into a crisis like no other, the IMF has mobilized a response like no other,” it stated. The crisis exacerbated existing, pre-pandemic vulnerabilities, and countries’ prospects are diverging, it noted.
Another unprecedented action
“The August 2021 approval of a new allocation of Special Drawing Rights (SDRs) is another unprecedented action, wrote Managing Director Kristalina Georgieva in the introduction to the report.
“At $650bn, this is the largest allocation in the IMF’s history, and it will substantially boost the reserves and liquidity of the IMF’s member countries, without adding to their debt burdens.
“We are also exploring options for those with strong financial positions to voluntarily channel SDRs to vulnerable countries.”
She additionally wrote, “Together with the swift and extraordinary measures taken by governments and central banks, these actions helped put a floor under the global economy in the early stages of the crisis and provided the basis for the emerging recovery.
“But this recovery is on two tracks: economic fortunes across countries are diverging dangerously, driven by dramatic differences in access to vaccines and the scope to provide policy support. While advanced economies are bouncing back, the crisis is deepening for many emerging market and developing economies.
“The most urgent task remains to get the world vaccinated as quickly as possible. This is key to ending the pandemic and ensuring a sustainable long-term recovery everywhere.”
Suffering disproportionate income losses
Nearly half of emerging market and developing economies and some middle-income countries risk falling further behind, undoing much of the progress made toward achieving the UN Sustainable Development Goals, according to the report.
Within countries, inequality is on the rise as well; workers with fewer skills, youth, women, and those informally employed are suffering disproportionate income losses, it made clear.
Sustaining the recovery will require an ongoing policy push, including to secure and expand access to vaccines; and to maintain economic lifelines; and targeted policy support; tailored to the stage of the pandemic; the strength of the economic recovery; and countries’ structural characteristics, it said.
It indicated that the 2021 Annual Report highlights the IMF’s work on the response to COVID-19; the great divergence; debt; and building toward a green, inclusive, and digital future. In FY 2021, the IMF continued to support its members in our three core areas of activity; The economic surveillance included 36 countries, according to the report.
Some $98bn given to 54 countries; including $10bn to 31 low-income countries (for a total of $110+ 1bn since the start of the pandemic). In addition, $251mn allocated for hands-on technical advice, policy-oriented training, and peer learning.