•Partial and uneven recovery expected in 2021.
•IMF has called for unity to help the poorest and most vulnerable economies, especially those struggling with high debt or dependent on hard-hit sectors.
The International Monetary Fund (IMF) has called for further action to secure a resilient recovery, as economies across the globe continue to suffer the effects of Covid-19.
“Due to the continuing impact of the Covid-19 pandemic, the global economy faces a deep recession this year, with partial and uneven recovery expected in 2021,” IMF managing director Kristalina Georgieva said in a statement over the weekend.
While there remains great uncertainty on the outlook, the unprecedented actions taken by the G20 countries and others have helped to avert a much worse outcome, Georgieva noted.
“As we enter the next phase of the crisis, further policy action will be required, as well as increased international cooperation. The G20 Action Plan is key to this effort,” she said.
She spoke after the virtual meeting of the Group of 20 (G20) Finance Ministers and Central Bank Governors, chaired by Saudi Arabia.
She emphasized that public health response remains the main priority to protect people, jobs, and economic activity.
She said supportive fiscal and monetary policies also need to continue until economies can secure a safe and durable exit from the crisis.
“Premature withdrawal of this support could derail the recovery and incur larger costs,”, Georgieva said.
Kenya is among countries that have sought debt deferment as the economy takes a beating from the effects of the virus.
In May, the IMF raised Kenya’s risk of debt distress to high from moderate due to the impact of the coronavirus crisis.
The country’s debt is at an all-time high of Sh6.3 trillion, as of March.
Georgieva on Saturday called for unity to help the poorest and most vulnerable economies, especially those struggling with high debt or dependent on hard-hit sectors.
“ The G20’s Debt Service Suspension Initiative (DSSI) has been commendable and I hope that consideration will be given to extending it,” she said.