The International Monetary Fund (IMF) said, over a statement released today, Tuesday, that its Board of Directors has agreed to allot $ 650 billion to refresh the world economy after the Corona pandemic.
The statement published on the official website of the fund added that distribution of these funds will start on August 23 and withdrawal rights will be available to members of the fund according to their shares.
The IMF revealed that $ 175 billion were allotted to the emerging economies and low-income countries.
On her part, Kristalina Georgieva, managing director of the IMF, has described this decision as historic because it resembles vaccination of the world economy during an unprecedented crisis.
On the other hand, Experts of the IMF indicated that the negative fallouts of the Coronavirus (known also as COVID-19) led to losses during the period from through 2024 to hit $ 15 trillion.
However, Jeffrey Okamoto, First Deputy Managing Director of the IMF confirmed on July 21, that since March 2020, governments across the world have spent $16 trillion to provide financial support during the pandemic, and central banks globally have increased their balance sheets with a combined value of $7.5 trillion.
He explained that deficiency in economies of various countries hit the highest level since the Second World War (WWII), adding that the central banks offered liquidity more than what was offered in the last ten years.
He continued to say that the Fund research indicates that without the actions of policymakers, last year’s recession, which was the worst peacetime recession since the Great Depression in the 20s of the 20th Century, would have tripled the level it has already reached.
“In the coming year, like vaccine production and numbers of immunized recipients increase, and as more economies reopen, policymakers should plan a fundamental shift from seeking to save their economies from collapse to strengthening these economies to weather future events through growth-focused reforms,” he said.
In view of inflation rising above forecasts and the uncertainty of when its drivers will recede, the pro-growth reforms targeting the supply side prevent any persistent inflationary risks arising from demand-side pressures in the United States and other countries.
For emerging market countries that have managed to maintain access to global capital markets, reforms can strengthen their economic fundamentals and boost investor confidence even as financial conditions tighten, especially if inflation persists in advanced economies.