Almost $ 20 trillion has already been spent on supporting the global economy
According to the International Monetary Fund, governments and regulators have invested a combined $ 19.5 trillion to bolster the foundations of the global economy hit by the pandemic. Some countries need even more help to get out of the crisis, but they risk not getting it.
As of September, authorities from around the world have allocated $ 12 trillion for stimulus measures, and local central banks have provided about $ 7.5 trillion to cushion the impact of the pandemic on their economies, according to the annual report of the IMF.
Despite unprecedented scale of support and solutions, who cut taxes, saved salaries, provided loans to small businesses and brought interest rates to record lows, the global economy is experiencing the strongest recession since the Great Depression. Economic activity and employment in many parts of the world, including the US and Europe, remain well below levels seen before the pandemic..
Vaccine developers are making headway in predicting a global economic renaissance next year, but it will still be very difficult in the coming months. Obstacles getting in the way of additional financial support could damage an already fragile recovery.
«Countries now face a long recovery that will be difficult, uneven, uncertain and prone to setbacks.», – said the head of the IMF Kristalina Georgieva.
In the United States, where the number of cases of the virus is growing rapidly, the president’s refusal Donald Trump admit victory Joe Biden may delay the approval process another major support package. Since the beginning of the epidemic, about 10 million workers places, and several states are currently introducing new restrictions to contain the rise in incidence, making recovery even more difficult.
The European Union, meanwhile, faces internal problems that could delay the approval process. using his € 800 billion recovery fund, which took months to negotiate and is due to come into effect on 1 January.
Earlier this week, Hungary and Poland took steps to block the package, questioning whether the needed funds would reach the worst-hit EU economies, including Italy, Spain and Greece..
Economists believe that a reduction in government support will negatively affect the pace of recovery from the pandemic.
«The premature withdrawal of financial aid is the biggest risk economies face in the short term. This can be a devastating mistake.», – said Neil Shearing, Chief Economist, Capital Economics Group.
«A prolonged period of weak demand, softened by massive fiscal stimulus, poses the greatest threat to economic growth», – he added.
World governments pump trillions into their economies
Pope harshly criticized the global economy