IMF confirms transfer of US $ 4.3 billion to Argentina at the end of August

“The good news is that the global recovery is progressing largely in line with the April IMF report. with a growth projection of 6% this year “argues Georgieva. And he adds that “after a crisis like no other, we are witnessing in some countries a recovery unlike any other, driven by a combination of strong support policies and rapid vaccinations”.

Among developed countries, it stands out the projected recovery for the United States, 7% this year, the highest since 1984. The recovery is accelerating similarly in China, the euro area and a handful of other advanced and emerging economy countries. Diagnosis which strengthens the possibilities of exporting Argentinian products.

“But the data also confirms a growing divergence in economic fortunes, with a large number of countries lagging behind,” said the director of the Fund.

bidirectional

Georgieva warns “world is facing a two-way recovery” (one positive) and the other “worsening, due to dramatic differences in vaccine availability, infection rates and capacity to provide supportive policies. Economy Minister Martín Guzmán will meet with Fund members as part of the G20 meeting and will surely highlight Argentina’s needs in the face of the pandemic.

This leads to “A critical moment which calls for urgent action by the G20 and policy makers around the world.”

IMF estimates show that faster access to vaccines for high-risk populations could potentially save more than half a million lives in the next six months alone.

The head of the multilateral organization said that, the Delta variant is causing concern everywhere, even in the G20 countries, resulting in “a sharp increase in infections in sub-Saharan Africa”. In this region, less than 1% of adults are fully immunized, compared to an average of over 30% in more advanced economies.

The reduction in fiscal resources will make it even more difficult for the poorest countries to increase vaccines and support their economies, says Georgieva, warning that “This will leave millions of people unprotected and vulnerable to growing poverty, homelessness and hunger.”

Inflation

In a warning train, the Fund director also said the world is on the lookout for the recent surge in inflation, especially in the United States: “There is a risk of rising inflation or inflation expectations, which could potentially necessitate a tightening of US monetary policy.”.

The problem is worrying because Higher interest rates in the United States “could lead to a sharp tightening of global financial conditions and large capital outflows from emerging and developing economies.” Particularly, This scenario would pose greater challenges to countries with large external financing needs or high debt levels..

Guzmán will surely mention this point to strengthen his initiative for the agency to reduce interest increases. Likewise, the head of the Palacio de Hacienda mentioned the need for the IMF to assess the creation of a new line of financing with a duration of more than 10 years. In “This is a critical moment for the world”, Georgieva believes that urgent measures are needed to overcome the uneven recovery.

Help

The first step, he said, is to advance international cooperation to end the pandemic.

Staff recently launched a $ 50 billion plan that could generate trillions of dollars to expand vaccinations and accelerate economic recovery. To accelerate the implementation of these actions, the IMF, the World Bank, the World Health Organization and the World Trade Organization have formed a “war room” in which they agreed to work together to help monitor, coordinate and promote the provision of vital health care. services, tools for developing countries and for mobilizing policy makers to remove critical barriers.

Support from the G20 and other economies will make a difference, according to Georgieva, by supporting the goal of immunizing at least 40% of the population in all countries by the end of 2021, and at least 60% by the first half of 2022.

To achieve these goals, critical actions would include increased dose sharing with developing countries; support for grants and concessional financing to increase and diversify vaccine production, strengthen administration, diagnostics and therapy, and remove all barriers to exports of finished vaccine and supplies and supply chain operations.

Recovery

The second step is to secure the recovery, said the IMF chief. He recalled that, under the leadership of the G-20 economies, the world has taken extraordinary and synchronized action, especially around $ 16 trillion in tax actions. In countries where infections are rising rapidly, he said, it is essential that healthcare for vulnerable people, households and businesses continue to be supported. Yes “This requires specific fiscal measures, within credible medium-term frameworks.”

And as a third step, Georgieva found it necessary to support vulnerable economies. Estimate that Low-income countries need to deploy around $ 200 billion over 5 years just to fight the pandemic. And after An additional $ 250 billion to have the fiscal space needed to carry out structural reforms. For this, it is vital that the richest nations redouble their efforts, especially in concessional financing and debt management.

For its part, the IMF has granted 114 billion dollars in new financing to 85 countries and debt service relief to the poorest members. In addition, he anticipated that the Fund would work to amplify the impact of the new SDR allocation, by encouraging the voluntary channeling of some SDRs, as well as budgetary loans, to achieve a total overall target of $ 100 billion for the poorest and most vulnerable countries.

He said they were exploring ways to achieve this, including through the Poverty Reduction and Growth Trust program and possibly a new Resilience and Sustainability (RST) trust. This week’s G20 meeting will, according to Georgieva, have the opportunity to push forward the plan for a new RST, to support low-income countries, as well as the poorest and most vulnerable middle-income countries devastated by the pandemic. .