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The director of the International Monetary Fund pointed out that ending the health crisis faster could add almost US$9 trillion to global GDP by 2025.
The International Monetary Fund (IMF) Director Kristalina Georgieva on Wednesday urged policymakers to provide flexible support tailored to varied needs across sectors and economies to foster a fair and inclusive recovery of the global economy.
"The good news is that there is light at the end of the tunnel. After the worst global recession since the second world war, the recovery is underway," said Georgieva at the IMF/World Bank Spring Meetings.
"Economic fortunes are diverging dangerously. A small number of economies, led by the U.S. and China, are powering ahead -- while poorer countries are falling behind in this multi-speed recovery," she added.
"We also face extremely high uncertainty, especially over the impact of new virus strains and potential shifts in financial conditions," she continued, adding that there is the risk of further economic scarring.
In order to give everyone a fair shot in recovery, Georgieva said policymakers should support vulnerable households and viable firms amid the crisis, adopt targeted fiscal measures, and maintain favorable financial conditions.
The global economy is poised for a substantial pickup in economic activity for the rest of this year and next year, although different policy responses, rates of vaccination, and underlying factors mean that growth will vary considerably across countries. #PIIEChartspic.twitter.com/JyLVQMGTcc
Noting that a vaccine policy is an economic policy, Georgieva said that ending the health crisis faster could add almost US$9 trillion to global GDP by 2025, yet the window of opportunity is closing.
"Governments must show the same sense of urgency and collaboration to provide vaccines to everyone, everywhere," she said.
Once the health crisis is over, governments should gradually scale back support programs -- while scaling up targeted hiring subsidies and retraining and reskilling, which is particularly important for young people and women, who have disproportionately suffered in the crisis.
Looking ahead, the focus should be on scaling up public investment -- in green projects and digital infrastructure, in health and education -- to ensure that everyone can benefit from the historic transformation to greener, smarter, and more inclusive economies, Georgieva said.
Countries will need sufficient public revenues and more efficient spending. In many cases, this will mean more progressive taxation, and international agreements on questions like minimum taxation for companies, she added.