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Policy reset can deliver a stronger, more resilient, equitable and sustainable post-pandemic recovery

The COVID-19 pandemic has brought social and economic disruption worldwide, but is also providing governments with the opportunity to put economies on a more sustainable and inclusive growth path while addressing the underlying challenges, according to the OECD’s Going for Growth policy report. Going for Growth 2021: Shaping a Vibrant Recovery analyses pre-existing weaknesses as well as those brought on by the pandemic, and offers policy makers country-specific advice to seize the opportunity for a fundamental reset. OECD Secretary-General Angel Gurría and Italian Minister of Economy and Finance Daniele Franco ...

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U.S.-China cooperation on sustainable finance “positive step” for world: IMF chief

It is a “positive step” for the world that the United States and China are cooperating on sustainable finance under the Group of 20 (G20), International Monetary Fund (IMF) Managing Director Kristalina Georgieva has said. “Certainly having the two largest economies cooperating on sustainable finance is a very positive step in a world that is undergoing transformation, primarily because of the pressures that are coming from climate risks, and also to make sure that social and environmental issues are well integrated in investment strategies,” Georgieva said in an exclusive interview ...

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IMF projects Asia’s economy to grow 7.6%

Asia’s economy is expected to grow by 7.6 percent this year, the International Monetary Fund (IMF) said Tuesday, while warning of “huge uncertainty” surrounding the projections. “The pandemic has resulted in unprecedented output losses in the Asia-Pacific region,” Jonathan D. Ostry, acting director of the IMF’s Asia and Pacific Department, said during a virtual news conference. The pandemic is receding in some countries, elsewhere, “second or third waves of infections are raging,” notably in India and some of the ASEAN economies, he noted, referring to the Association of Southeast Asian ...

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IMF says Japan’s economy can weather change of plan in Olympics

Cancelling or postponing the Tokyo Olympics Games probably will not hurt Japan’s economy much, but may require the government to offer targeted support for hard-hit small firms, a senior International Monetary Fund official said. While the government plans to proceed as scheduled, a renewed spike in coronavirus infections and slow vaccine rollouts have added to worries about the fate of the Olympics, set to start in July after being delayed from last year. “A change to the plans for the Olympics would have a limited impact on overall near-term growth ...

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IMF calls for additional euro zone fiscal stimulus in 2021-22

Euro zone countries should privide an additional fiscal stimulus of 3% of GDP in 2021-2022 to boost economic growth by 2% of GDP by the end of next year and reduce the negative effects of the pandemic, the International Monetary Fund said. In its regional outlook for the euro zone, the IMF said the extra fiscal boost could then be followed by stronger consolidation once excess capacity has been reduced. “Such additional support to the tune of 3 percent of GDP over 2021−22 could lift output by about 2 percent ...

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IMF offers rosier view on Asia, warns of Fed fallout on markets

The International Monetary Fund offered a more upbeat view on Tuesday on Asia’s economic outlook than six months ago, but warned a faster-than-expected rise in U.S. interest rates could disrupt markets by triggering capital outflows from the region. While Asia is rebounding from last year’s slump caused by the COVID-19 pandemic, there is a divergence between nations benefitting from surging global demand and those reliant on tourism, said Jonathan Ostry, deputy director of the IMF’s Asia and Pacific Department. “Setbacks in the vaccine rollout, questions about the potency of the ...

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CLIs continue to strengthen in most major economies

The OECD Composite leading indicators (CLIs), designed to anticipate turning points in economic activity relative to trend, continue to strengthen in most major economies. In the United States, the CLI continues to increase at a steady pace, driven an expansion in the consumer confidence. In Japan, Canada and the euro-area as a whole, particularly in Germany and Italy, the CLIs now point to a steady increase. In France, and now the United Kingdom, the CLIs signal stable growth. Among major emerging economies, the CLIs for India, Russia and the manufacturing ...

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Marginal fall in OECD unemployment rate in February 2021, to 6.7%, 1.4 percentage points above its pre-pandemic level

The OECD area unemployment rate declined in February 2021, to 6.7% (from 6.8% in January), remaining 1.4 percentage points above the level observed in February 2020, before the COVID-19 pandemic hit the labour market.[1] In February 2021, the unemployment rate was stable in the euro area, at 8.3% (1.0 percentage point above its pre-pandemic level). Latvia, with an increase of 0.2 percentage point (to 8.7%) and Slovenia with a decrease of 0.2 percentage point (to 4.9%) represented the largest changes in this area, while little movement was observed in other ...

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IMF: Weakening fiscal balance sheets biggest concern for emerging markets beyond 2021

Country groups and selected countries: GDP growth in 2020-22 (% YoY) The underlying story remains similar to the World Economic Outlook report in January, with the uplift mainly stemming from advanced economies which are expected to grow by 5.1% in 2021 and 3.6% in 2022 (vs 4.3% and 3.1%, expectations respectively, in January), thanks to the vaccine rollout momentum which will gather pace in 2H21 and additional fiscal support in a few larger economies, notably the US where 2021 growth has been revised up by 1.3 percentage points higher to ...

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IMF warns on rising debt risks in virus-hit Middle East, Central Asia

The International Monetary Fund said on Sunday countries in the Middle East and Central Asia need to curb their financing requirements, as a surge in government debt, exacerbated by the pandemic, threatens recovery prospects. The region, which includes around 30 countries from Mauritania to Kazakhstan, saw an economic rebound in the third quarter as countries relaxed measures to contain the new coronavirus. But the outlook remains highly uncertain and recovery paths will diverge depending on the speed of vaccinations, reliance on heavily impacted sectors, such as tourism, and countries’ fiscal ...

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IMF, World Bank urged to aid middle-income country debt distress

The International Monetary Fund and World Bank should do more to help address the growing debt challenges of middle-income countries and identify the “root causes of excessive and unsustainable debt,” the institutions’ Development Committee said on Friday. In a communique, the joint ministerial committee representing members also called on the institutions to assess the impact of climate change on macroeconomic and financial stability. “We further encourage the (World Bank Group) and IMF to support a measurable impact in the transition to a low-carbon economy, while considering countries’ energy needs and ...

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IMF, World Bank to unveil ‘green debt swaps’ option by November, Georgieva says

Green debt swaps have the potential to spur accelerated action on climate change in developing countries, the head of the International Monetary Fund said on Thursday, pledging to present an option for such instruments by November. IMF Managing Director Kristalina Georgieva said it made sense to address the dual climate and debt crises at the same time, and IMF members on Thursday had strongly backed the Fund taking a bigger role on the issue of climate risk. “When we are faced with this dual crisis – the debt pressures on ...

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Global economy recovering from pandemic, higher rates would hurt -IMF steering committee

International Monetary Fund’s steering committee on Thursday said the global economy is recovering faster than expected from the COVID-19 crisis, but warned that a spike in interest rates could be especially painful for emerging economies. In its communique, the International Monetary and Financial Committee (IMFC) stressed the importance of accelerating distribution of COVID-19 vaccines around the world, and pledged to strengthen international cooperation. “Elevated financial vulnerabilities could pose risks, should global financial conditions tighten swiftly,” the 24-member committee said. “The crisis may cause extended scarring and exacerbate poverty and inequalities, ...

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IMF chief worried about middle-income countries, urges expanded definition of ‘vulnerable’

The head of the International Monetary Fund on Wednesday said she would discuss with IMF members whether they back offering low- and no-interest financing to middle-income countries hit hard by the pandemic, not just the poorest countries. Managing Director Kristalina Georgieva said she was concerned about tourism-dependent and other middle-income countries that had weaker fundamentals and high-debt levels, even before the pandemic, and generally backed adoption of a broader definition of what makes a country “vulnerable.” The IMF’s Poverty Reduction and Growth Trust can currently only lend to the poorest ...

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IMF warns debt overhang and financial vulnerabilities pose double threat to economic recovery

Policymakers and central banks need to be “very selective” with stimulus measures to avoid endangering global economic growth over the medium term, according to a top official at the International Monetary Fund, with a debt overhang and financial vulnerabilities identified as possible risks. The warning comes as the IMF appears to be trying to orchestrate a delicate balancing act at its spring meetings this week. The Washington D.C.-based institute has singled out the U.S. for praise in enacting extraordinary stimulus amid the ongoing coronavirus crisis to fast-track a global economic ...

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