Pointing to shaky economies worldwide and an increasing divide between poor and rich countries, Kristalina Georgieva, head of the Washington, D.C.-based International Monetary Fund (IMF), said Monday (Jan. 18) the organization needs more resources, Reuters reported.
Georgieva has been vocal in pushing for a new allocation of the IMF’s own currency — Special Drawing Rights (SDRs) — in order to advance a move to a digital and green economy. The biggest IMF shareholder — outgoing U.S. President Donald Trump — has not signed off on the initiative, according to Reuters.
A new SDR allocation is similar to a central bank printing new money, Reuters reported, and would provide resources to countries proportionate to their shareholding, which is linked to the countries’ wealth.
“It will continue to be so important, even more important, for us to be able to expand our capacity to support countries that have fallen behind,” Georgieva said, according to Reuters.
Swedish Finance Minister Magdalena Andersson, the new chair of the IMF’s steering committee, said in a call with Georgieva that the “need for liquidity remained great, and she would consult with member countries on options for expanding liquidity,” Reuters reported.
The World Bank‘s Global Economic Prospects earlier this month said the global economy is anticipated to grow 4 percent this year, providing COVID-19 vaccines and investment in sustainable growth, according to PYMNTS. The world’s economy shrank 4.3 percent in 2020. The pandemic hit emerging economies especially hard.
The IMF has vastly increased concessional financing to developing markets amid the pandemic, including extending debt payments, Reuters reported. Georgieva said the IMF would likely extend the moratorium again depending on the pace of the vaccine.
In the Mastercard Economic Institute’s Economy 2021 report, Chief Economist Bricklin Dwyer said the first quarter of 2021 would be dominated by the deployment of the vaccine. Only after that could the global economy begin a multi-speed recovery, PYMNTS reported.
“With a vaccine in sight, we will be able to rebuild the connections lost this past year and forge a more resilient future — one that allows for inclusive, sustainable growth that benefits all individuals and businesses alike,” Dwyer said.