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How we can survive the great COVID lockdown: IMF Chief Economist Gita Gopinath

The COVID-19 pandemic has devastated lives and livelihoods. As countries tried to contain the virus, the world has been put in lockdown, triggering an economic crisis with far-reaching implications. Even after rapid financial policy and an economic restart, the recession and damage to businesses will have lasting effects, especially considering that global debt was already at record-breaking levels before the crisis began. In this interview, Gita Gopinath, Chief Economist at the International Monetary Fund, says the magnitude and speed of collapse in economic activity is unlike anything experienced in our ...

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G20: OECD Taskforce Meeting on Long-term Investment

The G20/OECD Taskforce on Long-term Investment held a virtual meeting to discuss the G20/OECD Collaboration with Institutional Investors and Asset Managers to promote infrastructure investment and address the infrastructure financing gap which has grown even wider in the wake of the COVID-19 pandemic. The G20/OECD Taskforce and its program of work helps to advance the work of the G20 Infrastructure Working Group as well as other related G20 groups addressing infrastructure financing and long-term financing issues. The Taskforce is made up of members from the G20 Infrastructure Working Group, non-G20 ...

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IMF: Why social safety nets should be extended long after lockdown

Fiscal policies have provided large emergency lifelines to people and firms during the COVID-19 pandemic. They are also invaluable to increase a country’s readiness to respond to a crisis and to help with the recovery and beyond. When the Great Lockdown finally ends, a strong economic recovery that benefits everyone will depend on improved social safety nets and broad-based fiscal support. This includes public investment in health care, infrastructure, and climate change. Countries with high debt levels will have to carefully balance short-term fiscal support for the recovery stage with ...

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IMF International Monetary Fund : Dampening the Impact of Global Financial Shocks on Emerging Market Economies

The COVID-19 pandemic is impacting emerging markets through an unprecedented combination of domestic and external shocks. Among the latter, the pandemic has led to a sharp increase in global risk aversion and an abrupt retrenchment in foreign capital flows. Based on historical experience, these types of global financial shocks can significantly affect macroeconomic conditions in emerging markets, even if the exchange rate is flexible. Our research in chapter 3 of the latest World Economic Outlookshows that emerging markets can enhance resilience to global financial shocks using macroprudential regulation. Emerging markets ...

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IMF chief warns full global economic recovery unlikely in 2021

The global economy will take much longer to recover fully from the shock caused by the new coronavirus than initially expected, the head of the International Monetary Fund said, and she stressed the danger of protectionism. Managing Director Kristalina Georgieva said the Fund was likely to revise downward its forecast for a 3% contraction in GDP in 2020, with only a partial recovery expected next year instead of the 5.8% rebound initially expected. In an interview with Reuters, she said data from around the world was worse than expected. “Obviously ...

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Economy: Unprecedented collapse in leading indicators for most major economies

Composite leading indicators (CLIs) in most major economies collapsed by unprecedented levels in April as containment measures for Covid-19 continued to have a severe impact on production, consumption and confidence. In China, however, where containment measures have already been eased, the CLI for the industrial sector is tentatively pointing towards a positive change in momentum, with April’s CLI and a large upward revision for March both pushing the CLI upwards. Some care is needed in interpretation, as only partial information is currently available for China in April. In addition to ...

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OECD unemployment rate up sharply in March 2020 with data for April pointing to an unprecedented rise

The OECD unemployment rate rose to 5.6% in March 2020 (up from 5.2% in February 2020), reflecting the impact of the Covid-19 pandemic, while early data for April signal an unprecedented increase. The number of unemployed across the OECD area, which now includes Colombia[1], rose by 2.1 million to 37 million in March. The rise was particularly marked among women and young people aged 15 to 24. Female unemployment increased by 0.5 percentage points (to 5.8%) compared with an increase of 0.3 percentage point for men (to 5.3%), while youth ...

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Over 300 lawmakers worldwide urge IMF, World Bank to cancel poor countries’ debt

Over 300 lawmakers from around the world on Wednesday urged the International Monetary Fund and World Bank to cancel the debt of the poorest countries in response to the coronavirus pandemic, and to boost funding to avert a global economic meltdown. The appeal came in a letter delivered to the heads of the World Bank and the IMF, as well as U.S. President Donald Trump and other world leaders amid growing concern that the pandemic will devastate developing countries and emerging economies. They asked the institutions to respond in 15 ...

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IMF chief says growth forecast cuts ‘very likely’ as coronavirus hits economies hard

International Monetary Fund Managing Director Kristalina Georgieva said on Tuesday it was “very likely” the Fund would cut global growth forecasts further as the coronavirus pandemic was hitting many economies harder than previously projected. “Incoming data from many countries is worse than our already pessimistic projections,” Georgieva said during a webcast conference sponsored by the Financial Times. “Very likely we are going to come up with the update to our projections some time in June, and at that point … our expectation is that there would be a bit more ...

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IMF’s Georgieva downbeat on global economic forecast, warns against protectionism

The head of the International Monetary Fund on Friday signaled a possible downward revision of global economic forecasts, and warned the United States and China against rekindling a trade war that could weaken a recovery from the coronavirus pandemic. Kristalina Georgieva, the IMF’s managing director, told an online event hosted by the European University Institute that recent economic data for many countries was coming in below the fund’s already pessimistic forecast for a 3% contraction in 2020. “With no immediate medical solutions, more adverse scenarios might unfortunately materialize for some ...

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Energy prices cause sharpest slowdown in OECD annual inflation since the financial crisis

Annual inflation in the OECD area slowed significantly to 1.7% in March 2020, compared with 2.3% in February, the largest deceleration since the financial crisis, as energy prices fell by (minus) 3.6% in March following a rise of 2.3% in February. Food price inflation, on the other hand, increased to 2.4% in March, from 2.0% in February. Excluding food and energy, OECD inflation was broadly stable at 2.1 % in March, compared with 2.2% in February. Estimates for the OECD area in April are not currently available but Eurostat’s flash ...

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OECD postpones 2020 Ministerial Council Meeting and Forum due to coronavirus precautions

In keeping with measures being taken around the world to slow the spread of the coronavirus, the OECD has taken the decision to postpone OECD Week 2020 – made up of its annual Ministerial Council Meeting (MCM) and public OECD Forum – from late May to a date to be agreed in due course. Member countries in the Council of the OECD agreed to the postponement proposed by this year’s Chair of the MCM, Spain, as the appropriate course of action to safeguard the health and safety of participants and ...

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IMF approved $18 billion in 50 requests for emergency pandemic aid – spokesman

The International Monetary Fund has approved requests for emergency pandemic aid from 50 of its 189 members for a total of about $18 billion and is continuing to work quickly through the remaining more than 50 requests, an IMF spokesman said on Thursday. The IMF’s executive board was working through requests at record speed and would consider a request from Egypt for both emergency financing and a stand-by lending arrangement on May 11, spokesman Gerry Rice told reporters in an online briefing. “It’s an IMF moving at an unprecedented speed ...

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Now is the time for public investment projects, IMF says

Countries around the world should use the novel coronavirus pandemic as an opportunity to invest in public infrastructure and other projects that take advantage of low interest rates, the International Monetary Fund said in a report on Wednesday. Countries should also strengthen their unemployment benefits and social safety nets in order to reinvigorate economic growth once the virus abates, the global lender said in its semi-annual Fiscal Monitor. “The COVID-19 pandemic of 2020 has strengthened the case for fiscal policy action and heightened its urgency,” the IMF said, referring to ...

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Tax and fiscal policies central to governments’ responses to Covid-19 crisis

With global economic activity facing a historic drop and government spending rising dramatically, the implications of the Covid-19 crisis on public finances and tax revenues are significant. Drawing on its multi-disciplinary expertise, the OECD is deploying its data gathering and analytical capacities to help governments face these unprecedented challenges while supporting businesses and people towards economic recovery. Today’s OECD Tax Talks webcast provided a full update on the OECD’s work on taxation in the context of Covid-19. Governments worldwide are taking multifaceted actions to support their citizens and businesses and ...

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