IMF warns against premature withdrawal of policy support

New Delhi: As economies limp back to normalcy amid the coronavirus pandemic, International Monetary Fund (IMF) Managing Director Kristalina Georgieva has advised countries to avoid premature withdrawal of policy support for businesses and employees.

Speaking at the 125th anniversary of the London School of Economics, the IMF MD noted that healthcare should be the first priority and spending on treatment, testing, and contact tracing is an imperative. So too is stronger international cooperation to coordinate vaccine manufacturing and distribution, especially in the poorest countries, she said, adding that only by defeating the virus everywhere can we secure a full economic recovery anywhere.

Speaking of the policy support to businesses, she said that it is important to provide continued monetary support and liquidity measures to ensure the flow of credit, especially to small-and medium-sized businesses.

"Avoid premature withdrawal of policy support. Where the pandemic persists, it is critical to maintain lifelines across the economy, to firms and workers such as tax deferrals, credit guarantees, cash transfers, and wage subsidies," Georgieva said.