The world economy is on extremely fragile ground, despite signs of improvement in recent months, and the covid-19 pandemic will cause “profound structural changes”, the International Monetary Fund (IMF) warned on Thursday.
“The post-pandemic economy will be very different from what was seen previously (…). It makes no sense today to invest in yesterday’s economy,” said IMF director general Kristalina Georgieva, in a conversation about the future of the economy.
The severity and magnitude of the impact of the pandemic, which has already caused more than one million deaths and the biggest economic recession in practically a century, has been the center of attention of that organisation’s videoconference meetings, reports the agency EFE.
The pandemic also causes the technical language commonly used in these meetings to be loaded with dramatic phrases.
One of the most used, ‘extraordinary times demand extraordinary solutions’, defends the billion dollar fiscal and monetary stimulus programs that are being implemented in the big economies.
Against this background, the director of the European Central Bank (ECB), Christine Lagarde, warned that it is essential not only to maintain support but also “to prevent it from being withdrawn suddenly”. The French leader also insisted on an integral and planned medium term.
“Well-designed structural measures will be necessary to reallocate resources over time to more viable sectors and thus minimize the permanent damage to our economies,” said Lagarde, who led the IMF between 2011 and 2019.
In the ‘Global Economic Outlook’ report, the IMF identified employment as one of the main victims of the pandemic. And he urged the authorities to draw up plans to “facilitate the transfer of workers from sectors that are likely to be reduced in the long run, such as the travel sector, to others that will continue to grow, such as e-commerce.”
For the president of the World Bank (WB, in English), David Malpass, the pandemic changed everything: “the way we work, the scope of our travels, the way we communicate, teach and learn.”
One of the most important indicators of the dramatic situation experienced today refers to poverty, as the pandemic will have a particularly serious impact on the most disadvantaged.
“In 2020, extreme global poverty will increase for the first time in more than 20 years as a result of the disturbances caused by the covid-19 pandemic,” stressed the World Bank in its most recent report released this week.
In May, in the worst scenario outlined, World Bank economists already predicted that 60 million people could fall into extreme poverty and, in August, the forecast was even more pessimistic, rising to 100 million people.
By the latest calculations, in 2021 almost 150 million people worldwide can fall into extreme poverty, with an estimated daily income of $ 1.9 (1.62 euros).
The covid-19 pandemic has already caused more than one million and ninety-three thousand deaths and more than 38.5 million cases of infection worldwide, according to a report made by the French agency AFP.