Wed, Apr 7, 2021
In her conversation with John Lipsky, IMF Managing Director Kristalina Georgieva warned that prospects for recovery are diverging dangerously across countries.
Prospects for Global Recovery: The Managing Director underscored the IMF’s emphasis on ensuring that all countries have a “fair shot” at vaccinating their populations, successfully navigating the crisis, and securing a digital, green, and equitable future. Going forward, three risks to the global economy stand out: debt traps, rising interest rates, and the possibility that some countries may be left behind as other economies digitalize and become greener.
G20 Meetings: Against this backdrop, the Managing Director commended the G20 Finance Ministers for an overall “very productive meeting” earlier that day. In particular, Georgieva expressed her support for the group’s progress on a global corporate tax, its decision to extend the DSSI, and its elevation of the sustainable finance group.
Sovereign Debt: The Managing Director also highlighted the importance of sovereign debt relief, emphasizing that ensuring the Common Framework’s success and increasing private sector participation will be important.
SDRs: Additionally, the Managing Director said she was pleased that the G20 endorsed a new SDR allocation, commenting that the IMF will work to prepare a “robust” SDR allocation proposal, increase SDR transparency, and work on a mechanism by which SDRs can be reallocated between countries.
Role of the IMF: Finally, the Managing Director reflected on the IMF’s continued importance to the global economy, emphasizing the IMF’s unique surveillance mandate, role as a “transmission line” for policymakers, and ability to serve as a critical first responder to global crises.