Large-scale stimulus programs, primarily in the United States and the European Union, have become a real salvation for a drowning world economy. The largest central banks were able to prevent the crash of indicators that came under pressure due to the pandemic. According to the International Monetary Fund (IMF), the global economy could have plunged by another 6% if the governments did not take necessary measures. IMF managing director Kristalina Georgieva praised the timely actions of the US and EU authorities that helped stave off another global financial crisis. She also pinpointed the contribution of other nations to the common cause.
In a speech to the International Financial Congress, the IMF chief noted that governments’ decisiveness and coordination of actions helped the global economy to escape a recession as it plunged by over 9%. Joint efforts prevented the economy from moving into a recession and even depression. Otherwise, the world economy would tumble by another 6%.
Based on the IMF’s estimates, global GDP shrank by 3.3% last year. The world economy is expected to expand by 6% in 2021 and by 4.4% in 2022. Kristalina Georgieva believes that if the situation does not get worse, it will become possible to talk about tapering.
The IMF’s chairwoman suggests that governments should focus on curtailing bond-buying programs without damaging the economy, though it can be hard. Meanwhile, some measures, like swap lines that play an important role in protecting populations, could be institutionalized in the future.
