IMF body worried about lasting scars on global economy from pandemic

SEJONG, Oct. 15 (Yonhap) -- The coronavirus pandemic is likely to leave "long-lasting scars" on the global economy, although an uneven global economic recovery is underway, an advisory body of the International Monetary Fund (IMF) said Thursday.

After holding a videoconference with representatives from its 24 member countries, the International Monetary and Financial Committee (IMFC) said monetary policy must remain accommodative to climb out of the unprecedented crisis.

"A tentative global economic recovery is underway, supported by extraordinary macroeconomic policy responses. But the recovery is partial, uneven, and marked by significant uncertainty, with the pandemic continuing to spread in places," the IMFC said in a statement.

"The crisis threatens to leave long-lasting scars on the global economy, such as weaker productivity growth, heavier debt burdens, heightened financial vulnerabilities, and higher poverty and inequality," it said.

The IMFC has expressed support for the IMF's anti-crisis package and called for additional measures to provide aid to susceptible members as the coronavirus pandemic is tipped to plunge the global economy into a recession this year.

IMF's crisis management package includes simplified approval procedures for emergency lending, doubling of the cap on rapid financing instruments and rapid credit facility, the provision of liquidity to countries with solid economic fundamentals and debt relief for the world's poorest and vulnerable nations.

An effective and affordable vaccine is the key to overcome the pandemic and revive the global economic growth, the IMFC said.

"We emphasize the need for international cooperation to accelerate the research, development, manufacturing, and distribution of COVID-19 diagnostics, therapeutics and vaccines, with the aim of supporting equitable and affordable access for all, which is key to overcoming the pandemic and supporting global economic recovery," it said.

In its latest report, the IMF said that the global economy is expected to shrink 3 percent this year, compared with its January prediction of a 3.3 percent expansion.

Global economic activity has been battered by the coronavirus outbreak that has led to massive lockdowns in the United States and major European countries.

Globally, more than 38 million people have been infected by the new coronavirus, which was first detected in the Chinese city of Wuhan late last year, and more than 1 million have died, according to a tally by Johns Hopkins University.

kdh@yna.co.kr
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