International Monetary Fund (IMF) on Monday said after the coronavirus outbreak the world cannot afford to take social cohesion for granted, underscoring the need for countries to calibrate their social policies to reduce inequality, protect vulnerable sections, and promote fairness in access to opportunities.
In a blog post ‘A Global Crisis Like No Other Needs a Global Response Like No Other’ after the first-ever virtual spring meeting of the IMF and the World Bank concluded, IMF Managing Director Kristalina Georgieva said the global outlook was dire.
“We expect global economic activity to decline on a scale we have not seen since the Great Depression. This year 170 countries will see income per capita go down — only months ago we were projecting 160 economies to register positive per capita income growth,” she wrote.
The IMF managing director said policy advice will need to adapt to evolving realities to help lay the foundations for a strong recovery. “In the new post-COVID-19 world, we simply cannot take social cohesion for granted. So we must support countries’ efforts in calibrating their social policies to reduce inequality, protect vulnerable people, and promote access to opportunities for all,” said Georgieva, who has served the acting president of the World Bank Group in 2019.
“We need to have a better understanding of the specific challenges, risks and tradeoffs facing every country as they gradually restart their economies,” she added.
Economies across the world are looking to maintain extraordinary stimulus and unconventional policy measures. However, questions persist on how long to unwind the, dealing with high unemployment and ‘lower-for-longer’ interest rates, preserving financial stability, and facilitating sectoral adjustment and private sector debt workouts.