Joint efforts by International Monetary Fund member countries have helped minimise the economic and financial impact of the Covid-19 pandemic, however, the uneven recovery across many regions poses challenges, the UAE’s Minister of State for Financial Affairs said.
The IMF upgrading its global economic forecast for a second time this year is a strong reflection of "decisive and joint interventions" that the fund's member countries made to sustain their economies and "mitigate the repercussions of the unprecedented global health crisis", Obaid Humaid Al Tayer told the International Monetary and Financial Committee meeting held recently on the sidelines of the IMF and World Bank virtual spring meetings.
The global economy is set to grow by 6 per cent this year, compared with the IMF’s previous forecast of 5.5 per cent, underpinned by Covid-19 vaccination campaigns and fiscal and monetary support provided by governments and central banks, the IMF said last week.
The revision comes after a 3.3 per cent contraction last year as the pandemic disrupted trade, hindered travel and caused lockdowns worldwide. Next year's growth is projected at 4.4 per cent, compared with an earlier estimate of 4.2 per cent.
There is, however, divergent recovery between and within countries, especially in the Middle East and North Africa region, a concern the UAE shares with the IMF, Mr Al Tayer said.
Widening inequality gaps requires constant vigilance, particularly when balancing medium-term fiscal priorities with inclusive development objectives, the minister said.
“The UAE will continue supporting IMF’s endeavours to mitigate the financial and economic repercussions of the pandemic to achieve global recovery and attain strong, sustainable, balanced and comprehensive economic growth.”
The health response is another pressing priority and the production and fair distribution of vaccines are equally important to ensure a fast and sustainable recovery, Mr Al Tayer said.
Middle-income countries are struggling to fund their health response and the lack of concessional financing mechanism means they have started to exhaust their fiscal capabilities.
The IMF should deploy all the tools at its disposal including lending, surveillance, and technical assistance, he said.
“Beyond just recovery, we must pursue socially inclusive and environmentally sustainable models of growth as the only path forward in the post Covid-19 era, where the IMF can support by facilitating the exchange of expertise, supporting capacity building, and enabling funding efforts,” Al Tayer said.
