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Dear Colleague,
Welcome to the April 8 briefing of the 2021 Spring Meetings.
Today we spotlight the press briefing of the International Monetary and Financial Committee (starting soon), IMF Managing Director Kristalina Georgieva's Global Policy Agenda, an analytical corner session on digitalization, and a flagship IMF Seminar conversation on the global economy. On that note, let's get started.
📣 Tomorrow will be our last daily briefing on the Spring Meetings, so please take 60 seconds and share your feedback on the convening and our coverage. Your thoughts will help us shape future events and updates.
Today's media partner: Caixin, one of the most respected sources for macroeconomics, finance and business news and information about China.
TODAY'S AGENDA (THURSDAY, APRIL 8)
Speakers: Kristalina Georgieva, Managing Director, IMF; Magdalena Andersson, Chairman for the International Monetary Fund and Financial Committee (IMFC) //
Moderator: Gerry Rice, Director, Communications Department, IMF.
Speakers: Diego Cerdeiro, Asia and Pacific Department, IMF; Alpa Shah, Fiscal Affairs Department, IMF; Catalina Margulis, Legal Department, IMF.
Speakers: Kristalina Georgieva, Managing Director, IMF; Jerome Powell, Chair, Federal Reserve; Paschal Donohoe, Finance Minister, Ireland; Ngozi Okonjo-Iweala, Director-General, World Trade Organization (WTO) // Moderator: Sara Eisen, CNBC Co-Anchor “Closing Bell”.
THE MANAGING DIRECTOR'S GLOBAL POLICY AGENDA
IMF Managing Director Kristalina Georgieva unveiled her Global Policy Agenda on Wednesday.
"While there is light, the economic crisis continues to cast a dark shadow," she said in opening remarks to a press conference, channeling Russian author Leo Tolstoy.
A fair shot on three fronts: Policymakers must take the right actions now by giving everyone a fair shot. That includes a fair shot at accessing the vaccine, a fair shot at support during the recovery, and a fair shot at the future in terms of participating and benefitting from public investments in green, digital, health and education opportunities.
"Economic fortunes are diverging dangerously. A small number of advanced and emerging market economies, led by the U.S. and China, are powering ahead—weaker and poorer countries are falling behind in this multi-speed recovery," she said.
"We also face extremely high uncertainty, especially over the impact of new virus strains and potential shifts in financial conditions. And there is the risk of further economic scarring from job losses, learning losses, bankruptcies, extreme poverty and hunger."
Read the full Global Policy Agenda and 📺 watch the press briefing or read the transcript.
THE WORLD IS WAY BEHIND
US Special Presidential Envoy for Climate John Kerry sounded the alarm on the need to address climate change in an event with IMF Managing Director Kristalina Georgieva. Kerry said an upcoming summit will bring world leaders together to raise ambition on a global level.
"The world is way behind," he said. "If you believe it's an existential challenge, and I believe for many people it is, we are not behaving that way as a world. We've got to pull our act together. We need concessionary finance as well as normal commercial investment finance."
"We believe very, very deeply that this is going to be the biggest economic transformation since the Industrial Revolution," he added.
The IMF's role: The MD made the point that carbon pricing, funding for public investment, and creating a just transition for those that will see their livelihoods and business impacted by a shift to a climate economy are three critical areas going forward.
"It's very important we don't allow another divergence in the future in which the richer world accelerates the transition to the new climate economy and the poorer world is left behind," Georgieva said. "All hands on deck and international financial institutions have a huge role to play directly through our financing and indirectly by advocating for support for those that are most vulnerable."
📺 Watch the full event here.
CLIMATE CHANGE INDICATORS DASHBOARD
The IMF launched its new Climate Change Indicators Dashboard (CID), which provides access to climate-related data for macroeconomic and financial analysis. It includes economic and climate indicators such as greenhouse gas emissions; financial, physical and transition risk indicators such as carbon footprint-adjusted loans; cross-border indicators; and policy indicators. The dashboard was built in collaboration with international organizations and aims to support policy makers and the general public, in addition to the IMF’s work.
📺 Tune in tomorrow, April 9 at 10 a.m. to a presentation by IMF experts on the new dashboard.
TOMORROW'S AGENDA (FRIDAY, APRIL 9)
Speakers: Dirk Jan Grolleman, Senior Financial Sector Expert, IMF; Tanai Khiaonarong, Senior Financial Sector Expert, IMF // Moderator: Ann-Margret Westin, Deputy Division Chief, Institute for Capacity Development, IMF
Speakers: Louis Marc Ducharme, Chief Statistician and Data Officer and Director, Statistics Department, IMF; Gabriel Quirós, Deputy Director, Statistics Department, IMF; Alberto Sanchez, Senior Data Analytics Officer, Statistics Department, IMF
Speakers: David Corvino, Asia and Pacific Department, IMF; Cristian Alonso, Fiscal Affairs Department, IMF; Tianxiao Zheng, Strategy, Policy, and Review Department, IMF; Paola Morales-Acevedo, Monetary and Capital Markets Department, IMF; Maksym Ivanyna, Institute for Capacity Development, IMF
RECAP OF YESTERDAY
"Global vaccination may well be the highest return public project ever identified," said Vitor Gaspar, the IMF's Director of Fiscal Affairs.
Gaspar and the IMF's W. Raphael Lam, Paolo Mauro, and Mehdi Raissi write in a new blog that if the global pandemic is controlled via vaccination, the resulting stronger economic growth would yield more than $1 trillion in additional tax revenues in advanced economies by 2025—and save more in fiscal support measures. The COVID-19 vaccination will thus more than pay for itself, providing excellent value for the public money invested in it. Read the full report and 📺 watch the press briefing here.
UN Special Envoy on Climate Action and Finance Mark Carney and Sri Mulyani Indrawati, Indonesia's Minister of Finance, examined how, with the right measures, this transition may be one of the greatest opportunities to reshape the global economy, to achieve the Sustainable Development Goals, and to reduce poverty. 📺 Watch the full event here.
Habtamu Fuje and Rasmane Ouedraogo, both of the IMF's African Department, presented evidence that indicates regional inequality has declined markedly in the 1990s and the 2000s in sub-Saharan Africa, but the progress has slowed down in the past decade. Ervin Prifti and Christian Bogmans, of the IMF's Research Department, presented research on how the pandemic has erased decades of work on hunger reduction. Tim Willems of the IMF's Strategy, Policy, and Review Department and Chanda DeLong of the IMF's Legal Department, discussed the advantages of an auction-based sovereign debt restructuring mechanism. 📺 Watch the presentations here.
How should country authorities respond to rising inequality and poverty and large income disparities? A holistic approach is required to address these interconnected issues. In this peek into training event, IMF officials share some practical tools to assess economic disparities as well as the policies to achieve inclusive growth. 📺 Watch the IMF Capacity Development event with Sharmini Coorey, Director, Institute for Capacity Development, IMF; Antoinette Sayeh, Deputy Managing Director, IMF; Valerie Cerra, Assistant Director and Division Chief, IMF; Maksym Ivanyna, Economist, IMF; Nathalie Pouokam, Economist, IMF; and Nikola Spatafora, Senior Economist, IMF.
EARLIER THIS WEEK
World Economic Outlook: "It is one year into the COVID-19 pandemic and the global community still confronts extreme social and economic strain as the human toll rises and millions remain unemployed. Yet, even with high uncertainty about the path of the pandemic, a way out of this health and economic crisis is increasingly visible," IMF Chief Economist Gita Gopinath writes in a new blog. However, recoveries are diverging dangerously across and within countries, as economies with slower vaccine rollout, more limited policy support, and more reliance on tourism do less well. 📺 Click here to watch the press conference and read the IMF's latest World Economic Outlook report. 🎙️ Listen to a new podcast on the report with Malhar Nabar.
Global Financial Stability Report: Global markets are watching the current rise of US long-term interest rates, worried that a rapid and persistent increase may result in tighter financial conditions, potentially hurting growth prospects. The good news is that the rising rates in the United States have been spurred in part by improving vaccination prospects and strengthening growth and inflation. The bad news is that the increase may reflect uncertainty about the future path of monetary policy and possibly investor concerns about the increased supply of Treasury debt to finance the fiscal expansion in the United States, as reflected by sharply rising term premia (investors’ compensation for interest-rate risk). Read the new blog by Tobias Adrian, and read the full report / 📺 watch the briefing. 🎙️ If you have 15 minutes, listen to a new podcast on the report with Fabio Natalucci.
David Malpass, President of the World Bank Group, Kristalina Georgieva, Managing Director of the International Monetary Fund, and Janet Yellen, U.S. Secretary of the Treasury discussed what is needed to support a faster and deeper economic recovery that lays a foundation for a more sustainable and inclusive global economic system. 📺 Watch the video here.
Managing Director Kristalina Georgieva discussed how tackling debt vulnerabilities is critical to prevent divergent recoveries. A panel that includes Mohamed A. El-Erian, President of Queens' College, Cambridge, and Vera Songwe, Under-Secretary-General of the United Nations explored ways to contain debt risks through better debt architecture and transparency and how global cooperation can help. 📺 Watch the discussion here.
In a new blog by the IMF's Phillipp Engler, Roberto Piazza and Galen Sher, based on the analytical chapter 4 of our latest World Economic Outlook, they write that the reason behind rising interest rates in advanced economies matters when it comes to the impact on emerging markets.
In a new blog by the IMF's Guillaume Chabert, Robert Gregory and Gaelle Pierre, based on a new policy paper, they estimate that low-income countries will need around $200 billion until 2025 to step up their response to the pandemic, and a further $250 billion to catch up with advanced economies. An additional $100 billion will be needed if risks identified in the baseline scenario materialize.
Aurélia Nguyen, Managing Director of the COVAX Facility and Sabina Bhatia, Deputy Secretary of the IMF, discussed the challenges of vaccine procurement and distribution, and highlighted the need for international cooperation to secure global and equitable access to vaccines. 📺 Watch the full event by clicking here.
In governor talks on Tuesday, Fahad Almubarak, Saudi Central Bank Governor, on policy responses to COVID-19, he said, "We made vaccines available to all those who live in Saudi Arabia, whether they are Saudis or non-Saudis. When it comes to health, there is no difference." 📺 Watch more here. Boris Vujčić, Governor of Croatian National Bank, on asset purchase programs in emerging markets, he said, "The longer the Asset Purchase Programs last, the higher the risk that both the governments and markets become highly dependent on these policies, and the more difficult the exits are." 📺 Watch more here.
📺 Watch more governor talks with officials from Brazil, Thailand, Spain and Burkina Faso.
The IMF Executive Board on Monday extended debt service relief for 28 eligible low-income countries through October 15. The debt relief will help free up scarce financial resources for vital emergency health, social, and economic support to help with the impact of the COVID-19 pandemic.
RECAP OF LAST WEEK
In a new blog by Federico J. Díez, Romain Duval, Chiara Maggi and Nicola Pierri, based on new staff research, they explain how the pandemic has hit small and medium enterprises particularly hard, partly because they are predominant in some contact-intensive sectors like hotels, restaurants, and entertainment. They also suggest that policymakers take novel and swift action to alleviate a wave of insolvencies.
IMF Managing Director Kristalina Georgieva set the stage for the Spring Meetings by discussing the future of the global economy at an event hosted by the Council on Foreign Relations and moderated by CNN's Fareed Zakaria. Read the full speech or 📺 watch the 60-min discussion.
Read a blog, based on the analytical chapter 2 of our latest World Economic Outlook, about how countries can slowly heal the economic scars that will result from the crisis. Another blog, based on analytical chapter 3 of our latest World Economic Outlook, explores how policies can lessen the pandemic’s harsh and unequal effects on workers.
Also, catch up on blogs covering analytical chapters of the Global Financial Stability Report. A blog based on the analytical chapter 2 explains how the easing of financial conditions in response to an economic crisis tends to accelerate buildups in leverage or the ability to borrow, which could cause trouble down the line. Another blog, based on the analytical chapter 3, finds that pandemic's shift to working from home has clouded the outlook for commercial real estate and potentially threaten financial stability.
Finally, tied to the release of the Fiscal Monitor, read a blog based on a new analytical chapter, that finds that inequality was a pre-existing condition that worsened COVID-19’s impact.
Click here to review the full rundown of last week.
HAVE YOUR SAY IN 60 SECONDS
📝 What do you think of the Spring Meetings and our newsletter coverage so far? Share your thoughts and feedback directly by answering this quick survey. Your comments will very much inform our agenda and coverage moving forward.
Sincerely,
IMF 2021 Spring Meetings Team
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