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Keeping Economic Data Flowing During COVID-19

3 days ago

By Louis Marc Ducharme, James Tebrake, and Zaijin Zhan
عربي, 中文
Accurate and timely economic data are crucial for informing policy decisions, especially during a crisis. But the COVID-19 pandemic has disrupted the production of many key statistics. Without reliable data, policymakers cannot assess how badly the pandemic is hurting people and the economy, nor can they properly monitor the recovery.
We are working with member countries and other international agencies to address these data disruptions and keep economic data flowing.

The significant data disruptions due to the COVID-19 pandemic require innovative data collection methods and data sources.

Three key statistical challenges
First, many staff in national statistical offices are now working from home due to lockdowns, often with

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COVID-19 Worsens Pre-existing Financial Vulnerabilities

7 days ago

By Tobias Adrian and Fabio Natalucci
عربي, 中文, Español, Français, 日本語, Português, Русский
Much the same way COVID-19 hits people with pre-existing health conditions more strongly, so is the pandemic-triggered economic crisis exposing and worsening financial vulnerabilities that have built up during a decade of extremely low rates and volatility.
Our recently released chapters 2-4 of the  Global Financial Stability Report focus on three potential weak spots: risky segments in global credit markets, emerging markets, and banks. Should the ongoing economic contraction last longer or be deeper than currently expected, the resulting tightening of financial conditions may be amplified by these vulnerabilities, causing more instability or even a financial crisis.

Vulnerabilities in credit

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Chart of the WeekTracking the $9 Trillion Global Fiscal Support to Fight COVID-19

9 days ago

By Bryn Battersby, W. Raphael Lam, and Elif Ture
Governments have put forward swift and significant emergency lifelines to protect people in response to the pandemic. We measured these in the April 2020 Fiscal Monitor and as countries have stepped up their efforts, we have updated the numbers.

The upward revision was largely because of a second wave of measures by governments as the economic fallout from the pandemic proves more severe.

So, where does the global fiscal support stand now?
The total is about $9 trillion, or $1 trillion more than the estimates just over a month ago. The breakdown looks like this: direct budget support is currently estimated at $4.4 trillion globally, and additional public sector loans and equity injections, guarantees, and other quasi-fiscal operations

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Dampening the Impact of Global Financial Shocks on Emerging Market Economies

10 days ago

By Damiano Sandri 
عربي, Español, Français, 日本語, Português, Русский
The COVID-19 pandemic is impacting emerging markets through an unprecedented combination of domestic and external shocks. Among the latter, the pandemic has led to a sharp increase in global risk aversion and an abrupt retrenchment in foreign capital flows. Based on historical experience, these types of global financial shocks can significantly affect macroeconomic conditions in emerging markets, even if the exchange rate is flexible.
Our research in chapter 3 of the latest World Economic Outlook shows that emerging markets can enhance resilience to global financial shocks using macroprudential regulation.

Emerging markets can enhance resilience to global financial shocks using macroprudential regulation.


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Making Economies More Resilient to Downturns

11 days ago

By John Bluedorn and Wenjie Chen
عربي, 中文, Español, Français, 日本語, Português, Русский
The world is in the grip of the COVID-19 pandemic and the ensuing Great Lockdown has pushed many countries into deep recessions—worse than during the 2008–09 global financial crisis. In response, governments and central banks all over the world have introduced strong discretionary (one-off and specific) fiscal and monetary measures to counteract the economic fallout caused by the spread of the coronavirus. Existing automatic stabilizers (such as income-based taxes and unemployment and household benefits), which differ across countries, have generally operated freely, providing some further cushion.
But with interest rates at record lows and public debts at historical highs in many countries, how can

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Chart of the WeekTracking Trade During the COVID-19 Pandemic

15 days ago

By Diego Cerdeiro, Andras Komaromi, Yang Liu, and Mamoon Saeed
With the current fast-changing developments, policy makers need to know what is happening to the economy in real time, but they often must settle for data telling them what happened many weeks ago. And international trade, which links countries through a complex web of supply chains, is an area where timely information is especially valuable from a global perspective.
Most trade takes place by sea, and—for navigational safety purposes—virtually all cargo ships report their position, speed, and other information many times a day. A new IMF methodology using these data can help better inform us how international trade is affected by the COVID-19 pandemic.
Building on machine-learning techniques, we can provide better answers to

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Emerging from the Great Lockdown in Asia and Europe

17 days ago

By Changyong Rhee and Poul M. Thomsen
عربي, 中文, 日本語, Русский
Several countries in Asia and Europe, where the COVID-19 outbreak appears to have peaked, are gradually reopening their economies. Without a vaccine or effective treatment, policymakers will be balancing the benefits of resuming economic activity against the potential cost of another increase in infection rates. They face difficult choices, in part, because the costs of erring in either direction could be very large.

The timing, sequencing, and pace of the planned exits differ across countries.

Given this, authorities are adopting a gradual and sequenced approach to reopening, along with the adoption of further prevention and containment measures. While some Asian countries have already moved down this path with some success,

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How Pandemics Leave the Poor Even Farther Behind

18 days ago

By Davide Furceri, Prakash Loungani, Jonathan D. Ostry
عربي, 中文, Español, Français, 日本語, Português, Русский
The COVID-19 crisis is now widely seen as the greatest economic calamity since the Great Depression. In January, the IMF expected global income to grow 3 percent; it is now forecast to fall 3 percent, much worse than during the Great Recession of 2008-09. Behind this dire statistic is an even grimmer possibility: if past pandemics are any guide, the toll on poorer and vulnerable segments of society will be several times worse. Indeed, a recent poll of top economists found that the vast majority felt the COVID-19 pandemic will worsen inequality, in part through its disproportionate impact on low-skilled workers.
Our evidence supports concerns about the adverse distributional

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State-Owned Enterprises in the Time of COVID-19

22 days ago

Vitor Gaspar, Paulo Medas, and John Ralyea
عربي, 中文, Español, Français, 日本語, Português, Русский
The pandemic has highlighted the role of the public sector in saving lives and livelihoods. State-owned enterprises are part of that effort. They can be public utilities that provide essential services. Or public banks that provide loans to small businesses. But some are also struggling and adding to the burden on government finances. These range from national oil companies that are dealing with a large fall in oil prices, to national airlines without enough passengers traveling.
Most people encounter state-owned enterprises every day. They are likely to provide the water you drink, the electricity you use, and the bus or metro you ride to work or school. They come in all shapes and sizes. Some

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Fiscal Policies for the Recovery from COVID-19

23 days ago

Vitor Gaspar, W. Raphael Lam, and Mehdi Raissi
عربي, 中文, Español, Français, 日本語, Português, Русский
Fiscal policies have provided large emergency lifelines to people and firms during the COVID-19 pandemic. They are also invaluable to increase a country’s readiness to respond to a crisis and to help with the recovery and beyond.
When the Great Lockdown finally ends, a strong economic recovery that benefits everyone will depend on improved social safety nets and broad-based fiscal support. This includes public investment in health care, infrastructure, and climate change. Countries with high debt levels will have to carefully balance short-term fiscal support for the recovery stage with long-term debt sustainability.

Countries need to invest $20 trillion more over the next 20 years in

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A “New Deal” for Informal Workers in Asia

29 days ago

By Era Dabla-Norris and Changyong Rhee
عربي,  中文, Español, Français,日本語, Português, Русский
Full or partial lockdowns to curb the spread of COVID-19 are having crippling effects on businesses and workers across Asia, as elsewhere. Among the most vulnerable of the workers are the ones working in part-time and temporary jobs without social insurance, and in sectors of the economy that are neither taxed, nor regulated by any form of government.
Known as informal workers, they are particularly vulnerable to dramatic collapses of income and loss of livelihoods.

Effective policy responses must reach informal workers and their families quickly to prevent them from falling (deeper) into poverty.

Informal workers account for a large share of the workforce in many countries in the region but

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COVID-19 Pandemic and the Caribbean: Navigating Uncharted Waters

April 29, 2020

By Krishna Srinivasan, Sònia Muñoz, and Varapat Chensavasdijai
Español, Français
As the COVID-19 pandemic continues to spread across the globe—bringing severe human and economic costs—the Caribbean is no exception. With over 1,000 confirmed cases, many countries have taken strong containment measures, such as border closures and lockdowns, to “flatten the curve.”
But the “sudden stop” in tourism is sharply slowing economic activity in the Caribbean, and growth in the region is projected to contract by 6.2 percent in 2020. This would be the deepest recession in more than half a century.

The “sudden stop” in tourism is sharply slowing economic activity in the Caribbean.

There are also possible spillovers to the financial system. For instance, lost output from firms and the high fiscal

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A Post-Coronavirus Recovery in Asia—Extending a “Whatever it Takes” Lifeline to Small Businesses

April 23, 2020

By Kenneth Kang and Changyong Rhee
عربي, 日本語
Asia was hit hard by the first wave of the coronavirus, as the sudden stop in activity struck households and firms simultaneously—first in China, then elsewhere in Asia, and now globally. Policymakers responded swiftly with aggressive spending to support the medical response and vulnerable households and firms. And central banks took swift actions to expand liquidity.
While this helped support financial markets and sentiment, we may be on the cusp of a new, more dangerous phase of “economic deleveraging” as firms struggle to repay loans and pay workers in the face of a sudden collapse in cashflow and tighter credit.
Full stop
In Asia and elsewhere, small and mid-sized enterprises are at greater risk in this new deleveraging phase. They are

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The Short-term Liquidity Line: A New IMF Tool to Help in the Crisis

April 22, 2020

By Geoffrey Okamoto
Challenging times for emerging markets
The COVID-19 pandemic has severely disrupted the global economy at every level. Across the world, financial conditions have tightened dramatically, with unprecedented portfolio outflows from emerging markets in terms of both size (a record of about $100 billion) and speed, and markets effectively frozen in some cases. This has created sizable demand for U.S. dollar liquidity, with emerging markets facing sharp liquidity shortages.

A short-term liquidity problem can quickly become a deeper and longer-lasting solvency problem.

Several institutions have responded to this challenge: major central banks extended bilateral swap lines to each other and to more countries than during the global financial crisis, and the New York Federal

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A Global Crisis Like No Other Needs a Global Response Like No Other

April 20, 2020

By Kristalina Georgieva
عربي, Português
I have been saying for a while that this is a “crisis like no other.” It is:

More complex, with interlinked shocks to our health and our economies that have brought our way of life to an almost complete stop;

More uncertain, as we are learning only gradually how to treat the novel virus, make containment most effective, and restart our economies; and

Truly global. Pandemics don’t respect borders, neither do the economic shocks they cause.

The outlook is dire. We expect global economic activity to decline on a scale we have not seen since the Great Depression.
This year 170 countries will see income per capita go down—only months ago we were projecting 160 economies to register positive per capita income growth.
Actions taken

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Economic Policy in Latin America and the Caribbean in the Time of COVID-19

April 16, 2020

By Alejandro Werner
 Español, Português
As of today, about 3,000 people have died from the COVID-19 virus in Latin America and the Caribbean. While the pandemic continues to spread across the region, countries are facing the worst economic recession since countries started producing national accounts statistics in the 1950s. The challenging external environment, coupled with much-needed measures to contain the pandemic, have led to a plummeting of economic activity across Latin America—where growth is poised to contract by 5.2 percent in 2020.
Given the dramatic contraction in 2020 and as countries implement polices to contain the pandemic and to support their economies—as emphasized in our previous blog—a sharp recovery in 2021 can be expected. Yet, even under this quick recovery

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COVID-19 Pandemic and the Asia-Pacific Region: Lowest Growth Since the 1960s

April 16, 2020

By Chang Yong Rhee
عربي, 中文, Français, 日本語, Русский
This is a crisis like no other. It is worse than the Global Financial Crisis, and Asia is not immune. While there is huge uncertainty about 2020 growth prospects, and even more so about the 2021 outlook, the impact of the coronavirus on the region will—across the board—be severe and unprecedented.

This is a real economic shock and requires protecting people, jobs, and industries directly.

Growth in Asia is expected to stall at zero percent in 2020. This is the worst growth performance in almost 60 years, including during the Global Financial Crisis (4.7 percent) and the Asian Financial Crisis (1.3 percent). That said, Asia still looks to fare better than other regions in terms of activity.
Downward revisions are substantial, ranging

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Fiscal Policies to Contain the Damage from COVID-19

April 15, 2020

Vitor Gaspar, W. Raphael Lam, and Mehdi Raissi
عربي, 中文, Español, Français, 日本語, Português, Русский
In times of pandemic, fiscal policy is key to save lives and protect people. Governments have to do whatever it takes. But they must make sure to keep the receipts.
The Fiscal Monitor shows how policymakers can offer emergency lifelines to: save lives; protect people from losing jobs and incomes, and companies from bankruptcies; and enable a recovery. So far, countries have taken fiscal actions amounting to about $8 trillion to contain the pandemic and its damage to the economy.

Governments should do whatever it takes but make sure to keep the receipts.

Emergency lifelines provided globally include higher spending and foregone revenues ($3.3 trillion), public sector loans and equity

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COVID-19 Crisis Poses Threat to Financial Stability

April 14, 2020

By Tobias Adrian and Fabio Natalucci
عربي, Español, Français, 日本語, Português
The COVID-19 pandemic has caused an unprecedented human and health crisis. The measures necessary to contain the virus have triggered an economic downturn. At this point, there is great uncertainty about its severity and length. The latest Global Financial Stability Report shows that the financial system has already felt a dramatic impact, and a further intensification of the crisis could affect global financial stability.
Since the pandemic’s outbreak, prices of risk assets have fallen sharply. At the worst point of the recent selloff, risk assets suffered half or more of the declines they experienced in 2008 and 2009. For example, many equity markets—in economies large and small—have endured declines of 30

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The Great Lockdown: Worst Economic Downturn Since the Great Depression

April 14, 2020

By Gita Gopinath
عربي, 中文, Español, Français, 日本語, Português
The world has changed dramatically in the three months since our last update of the World Economic Outlook in January. A rare disaster, a coronavirus pandemic, has resulted in a tragically large number of human lives being lost. As countries implement necessary quarantines and social distancing practices to contain the pandemic, the world has been put in a Great Lockdown. The magnitude and speed of collapse in activity that has followed is unlike anything experienced in our lifetimes.

April World Economic Outlook projects global growth in 2020 to fall to -3 percent.

This is a crisis like no other, and there is substantial uncertainty about its impact on people’s lives and livelihoods. A lot depends on the epidemiology of the

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An Early View of the Economic Impact of the Pandemic in 5 Charts

April 6, 2020

By John Bluedorn, Gita Gopinath, and Damiano Sandri
عربي, 中文, Français, Português
The COVID-19 pandemic has pushed the world into a recession. For 2020 it will be worse than the global financial crisis. The economic damage is mounting across all countries, tracking the sharp rise in new infections and containment measures put in place by governments.
China was the first country to experience the full force of the disease, with confirmed active cases at over 60,000 by mid-February. European countries such as Italy, Spain, and France are now in acute phases of the epidemic, followed by the United States where the number of active cases is growing rapidly. In many emerging market and developing economies, the epidemic appears to be just beginning.

In Italy, the first country in Europe

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Chart of the weekGlobal Uncertainty Related to Coronavirus at Record High

April 4, 2020

By Hites Ahir, Nicholas Bloom, and Davide Furceri
The coronavirus continues to spread. As more countries impose quarantines and social distancing, the fear of contagion and income losses is increasing uncertainty around the world.
A new measure of uncertainty related to pandemics and other disease outbreaks finds that uncertainty around the coronavirus is exceptionally high and is much higher than in past outbreaks.

To quantify uncertainty related to the coronavirus crisis and compare it with previous pandemics and epidemics, we developed the World Pandemic Uncertainty Index (WPUI)—a sub-index of the World Uncertainty Index—for 143 countries starting in 1996. To construct the index, we tally the number of times “uncertainty” is mentioned near a word related to pandemics or epidemics

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Economic Policies for the COVID-19 War

April 1, 2020

This blog is part of a special series on the response to the coronavirus.
By Giovanni Dell’Ariccia, Paolo Mauro, Antonio Spilimbergo, and Jeromin Zettelmeyer
عربي, Español, Français, 日本語, Русский
The COVID-19 pandemic is a crisis like no other. It feels like a war, and in many ways it is. People are dying. Medical professionals are on the front lines. Those in essential services, food distribution, delivery, and public utilities work overtime to support the effort. And then there are the hidden soldiers: those who fight the epidemic confined in their homes, unable to fully contribute to production.
In a war, massive spending on armaments stimulates economic activity and special provisions ensure essential services. In this crisis, things are more complicated, but a common feature is

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Maintaining Banking System Safety amid the COVID-19 Crisis

March 31, 2020

This blog is part of a special series on the response to the coronavirus.

By Tobias Adrian and Aditya Narain
عربي, 中文, Español, Français, 日本語, Português, Русский
Today we face economic upheaval potentially more severe than we witnessed during the global financial crisis. The coronavirus pandemic is a different kind of shock. Never before have modern economies shut down at the drop of a hat. From one week to the next, many workers lost their jobs and paychecks. Restaurants, hotels, and airplanes all emptied. And consumers and businesses now face steep losses in income—and potentially widespread bankruptcies.
Pressure on the banking system is growing and higher defaults on debt are imminent. And many now expect a shock to the financial sector similar in magnitude to the 2008 crisis.

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Europe’s COVID-19 Crisis and the Fund’s Response

March 30, 2020

This blog is part of a series providing regional analysis on the effects of the coronavirus.
By Poul M. Thomsen
عربي, 中文, 日本語, Русский
COVID-19 has struck Europe with stunning ferocity. While we do not know how long the crisis will last, we know that the economic impact will be severe. In Europe’s major economies, nonessential services closed by government decree account for about one-third of output. This means that each month these sectors remain closed translates into a 3 percent drop in annual GDP, and that’s before other disruptions and spillovers to the rest of the economy are taken into account. A deep European recession this year is a foregone conclusion.

Most of the nine non-EU emerging economies in Central and Eastern Europe have already applied for emergency assistance

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In It Together: Protecting the Health of Africa’s People and their Economies

March 25, 2020

This blog is part of a series providing regional analysis on the effects of the coronavirus.
By Karen Ongley and Abebe Aemro Selassie
中文, Español, Français, Português
The growing presence of COVID‑19 in sub-Saharan Africa threatens the same human costs as elsewhere in the world. The economic costs could be just as devastating.
Sweeping measures
For their part, countries in sub-Saharan Africa are acting decisively, taking sweeping measures to halt the advance of the virus, with limits on public gatherings, public safety campaigns, and similar measures.
But we also know that for society’s most vulnerable in the region, “social distancing” is not realistic. The notion of working from home is only possible for the few. So, difficult decisions to close borders (to people, but not

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COVID-19 Pandemic and the Middle East and Central Asia: Region Facing Dual Shock

March 24, 2020

This blog is part of a series providing regional analysis on the effects of the coronavirus.
By Jihad Azour
عربي, Français, Русский
The impact of COVID-19 and the oil price plunge in the Middle East and the Caucasus and Central Asia has been substantial and could intensify. With three-quarters of the countries reporting at least one confirmed case of COVID-19 and some facing a major outbreak, the coronavirus pandemic has become the largest near-term challenge to the region. Like much of the rest of the world, people in these countries were taken utterly by surprise with this development, and I would like to express my solidarity with them as they cope with this unprecedented health crisis.
This challenge will be especially daunting for the region’s fragile and conflict-torn

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Blunting the Impact and Hard Choices: Early Lessons from China

March 20, 2020

This blog is part of a series providing regional analysis on the effects of the coronavirus.
By Helge Berger, Kenneth Kang, and  Changyong Rhee
عربي, 中文, Español, Français, 日本語, Português, Русский
The impact of the coronavirus is having a profound and serious impact on the global economy and has sent policymakers looking for ways to respond. China’s experience so far shows that the right policies make a difference in fighting the disease and mitigating its impact—but some of these policies come with difficult economic tradeoffs.
Hard choices
Success in containing the virus comes at the price of slowing economic activity, no matter whether social distancing and reduced mobility are voluntary or enforced. In China’s case, policymakers implemented strict mobility constraints, both at

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COVID-19 Pandemic and Latin America and the Caribbean: Time for Strong Policy Actions

March 19, 2020

This blog is the first in a series providing regional analysis on the effects of the coronavirus.
By Alejandro Werner
عربي, 中文, Español,  Français, Português, Русский
COVID-19 is spreading very quickly. This is no longer a regional issue—it is a challenge calling for a global response. Countries in Latin America and the Caribbean have been hit later than other regions from the pandemic and therefore have a chance to flatten the curve of contagion.

Efforts on multiple fronts to achieve this goal are underway. In addition to strengthening health policy responses, many countries in the region are taking measures of containment, including border closures, school closings, and other social distancing measures.

For the region, a 2020 with negative growth is not an unlikely scenario.

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Policy Action for a Healthy Global Economy

March 16, 2020

This blog is part of a special series on the response to the coronavirus.
By Kristalina Georgieva
中文, Русский
While quarantining and social distancing is the right prescription to combat COVID-19’s public health impact, the exact opposite is needed when it comes to securing the global economy.
Constant contact and close coordination are the best medicine to ensure that the economic pain inflicted by the virus is relatively short-lived.
Many governments have already taken significant steps, with major measures being announced on a daily basis—including yesterday’s bold, coordinated moves on monetary policy.
But clearly, even more needs to be done. As the virus spreads, increased coordinated action will be key to boosting confidence and providing stability to the global economy.

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