Withdrawing aid too soon in response to COVID-19 could cause serious damage, warns IMF chief

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Withdrawing aid too soon in response to COVID-19 could cause serious damage, warns IMF chief




File photo of IMF Managing Director Kristalina Georgieva at a conference at the Vatican


© Reuters / REMO CASILLI
File photo of IMF Managing Director Kristalina Georgieva at a conference at the Vatican


WASHINGTON, Oct 14 (Reuters) – Halting spending aimed at containing the coronavirus pandemic and mitigating its economic effects could have serious consequences for the global economy, the head of the International Monetary Fund warned on Wednesday.

IMF Managing Director Kristalina Georgieva urged countries to invest in green projects and digital infrastructure to boost productivity and incomes, and said it is imperative to help low-income nations cope with heavy debt burdens.

“The outlook in recent months has become less bleak, although we continue to project the worst global recession since the Great Depression,” Georgieva told a news conference during the annual meetings of the IMF and the World Bank.

“In nine months of the pandemic, we are still grappling with the darkness of a crisis that has claimed more than a million lives, and has caused the economy to reverse, causing much higher unemployment, increasing poverty, and risk. of a ‘lost generation’ in low-income countries, “he added.

The IMF projects a partial and uneven recovery in 2021, with global growth at 5.2%, but warns that significant risks remain, including a resurgence of the virus.

“A lasting economic recovery is only possible if we overcome the pandemic everywhere,” he said, calling for strong international cooperation in the development and distribution of a vaccine.

Faster progress in medical solutions could accelerate recovery and add nearly $ 9 trillion to global income by 2025, which in turn could help reduce the income gap between the poorest and richest nations, he said. Georgieva.

The IMF chief said it was critical for all countries to continue essential measures to protect lives and livelihoods, including aid such as credit and wage subsidies.

“Disconnect (aid) too early and you risk severe, self-inflicted harm,” he said, adding that the agency has reached more than $ 280 billion in credit commitments, with more than a third of that amount approved since March. shortly after the crisis began.

(Report by Andrea Shalal, Edited in Spanish by Manuel Farías)

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