IMF says Covid-19 economic crisis 'far from over', more support needed

The International Monetary Fund on Wednesday warned that the coronavirus crisis was “far from over” and underscored the need for multilateral cooperation to ensure adequate supplies once a vaccine is developed.

In an essay published in Foreign Policy magazine, IMF Managing Director Kristalina Georgieva and chief economist Gita Gopinath said the ongoing economic recovery from the crisis was the result of the rapid implementation and unprecedented scale of government and central bank support, but more efforts would be needed.

“The recovery remains very fragile and uneven across regions and sectors. To ensure that the recovery continues, it is essential that support not be prematurely withdrawn,” the two economists wrote in the essay.

Covid-19, the disease caused by the new coronavirus has killed 900,000 worldwide, and the IMF estimates the total cost of the crisis will reach $12 trillion by the end of 2021, with low-income countries likely to need continued support.

The IMF has provided emergency funding to 75 countries, including 47 low-income countries, and said it was ready to provide further support to a wider range of middle-income countries.

In addition to supporting workers and businesses, and investing to arrest global warming and reverse rising inequality, the IMF leaders said governments must cooperate internationally to bring the health crisis to an end.

As of Sept. 8, at least 128 vaccines were under development, and 37 had reached human trials, they wrote, forecasting a 90% chance of developing a successful product.

But global cooperation was needed to ensure timely production, adequate supplies for all countries, regardless of their financial means, and an equitable distribution.

The IMF officials lauded creation of COVAX, a global Covid-19 vaccine allocation plan co-led by the World Health Organization that is backed by 76 rich countries, but not the United States.

“Globally synchronized, equitable vaccine distribution is in every country’s interest,” they wrote. “An uneven rollout might improve economic conditions in countries that secured the vaccine first but would not shield them from weak demand from trade partners struggling to recover without a vaccine.”