IMF says global economic crisis 'far from over', urges governments to continue support

International Monetary Fund (IMF) Managing Director Kristalina Georgieva and chief economist Gita Gopinath said that the world is emerging from the effects of the COVID-19 lockdown but warned that the crisis is far from over. The IMF officials co-authored a piece in the Foreign Policy magazine, where they said that government assistance across regions has helped the initial rebound of the global economy but added that they should not withdraw the support prematurely. 

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The funds official said that even as 80 percent of the economies have started to open up, employment rates in many countries have not returned anywhere close to pre-crisis levels. They added that low-skilled workers and young people are the most affected by the job crisis, which is the highest concern after the pandemic itself. 

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Vaccine is a permanent solution

The officials reiterated the earlier stance of the IMF that the government should take equity in firms, if needed, to avoid insolvency and prevent millions of jobs from getting destroyed. Georgieva and Gopinath stressed that the recovery remains fragile and that a full recovery is "unlikely" until a COVID-19 vaccine is developed. The officials also urged countries to find a multilateral solution from the distribution and supply of the potential COVID-19 vaccine, when and if available. 

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128 vaccines are under development, and 37 have reached human trials as of September 8. They said that an effort of this scale has a 90 percent success rate in delivering an effective product. The officials also urged to not delay the production of the vaccine once ready because it could choke the recovery process in many countries, mainly in low- and middle-income nations. They said that advance purchases of vaccines pose a risk because a vaccine may fail, however, those risks are trivial compared to risks imposed by the health crisis on the global economy, which the IMF projects up to $12 trillion by end of 2021. 

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