Solidarity key to building $650bn reserves: IMF

21 April, 2021 12:00 AM printer

WASHINGTON: Solidarity among countries was key to unprecedented fiscal and monetary measures that were introduced to cushion the global economy from the pandemic’s impact and will be essential for building $650 billion in additional reserves to support its continued recovery, according to the managing director of the International Monetary Fund.

The IMF initiatives such as the common framework for orderly debt resolution can also benefit from continued co-operation between its members, Kristalina Georgieva said on Tuesday at the Boao Forum on Asia, report agencies.

“In a world of change, one thing remains constant – the importance of solidarity between countries,” she said. “By further strengthening this kind of global co-operation, we can turn a world of change into a world of opportunity for all.”

Ms Georgieva’s comments echoed those of China’s President Xi Jinping, who called for greater global economic integration and warned against decoupling.

“International affairs should be conducted by way of negotiations and discussions, and the future destiny of the world should be decided by all countries,” Bloomberg cited Mr Xi as telling the Boao Forum, which was attended in person by more than 2,000 officials and business executives in the southern island province of Hainan.

The Chinese president said “the world shouldn’t be led on by the unilateralism of a few countries” and some countries “bossing others around”.

Erecting trade barriers “works against economic and market principles would only harm others without benefiting oneself,” he said.

Globally, governments provided $16 trillion in fiscal support last year, backed by $9tn in monetary accommodation from central banks. Roll outs of mass inoculation programmes and faster-than-expected recoveries in some major economies have prompted the IMF to upgrade its global economic forecast for the second time this year.

The fund now expects the global economy to grow 6 per cent in 2021, compared with its previous forecast of 5.5 per cent. The revision comes after a 3.3 per cent contraction last year. Next year’s growth is projected at 4.4 per cent, compared with an earlier estimate of 4.2 per cent.