The Crisis is Not Over, Keep Spending (Wisely) By Oya Celasun, Lone Christiansen, and Margaux MacDonald published by IMF (11/2020).
“The pandemic-induced economic crisis is set to leave deep scars. Human capital erosion from prolonged high unemployment and school closures, value destruction from bankruptcies, and constraints on future fiscal policy from elevated public debt top the list. Groups that were already poor and vulnerable are set to see the largest setbacks.
Swift and unprecedented action by policymakers, including among the Group of Twenty (G20) advanced and emerging market economies, helped avert an even worse economic crisis in the wake of COVID-19 than what has been witnessed. The G20 has provided around US$11 trillion in necessary support to individuals, businesses, and the healthcare sector since the start of the pandemic.
However, much of the fiscal support is now gradually winding down, and many benefits such as cash transfers to households, deferred tax payments, or temporary loans to businesses have expired or are set to expire by the end of this year.
The analysis in our G20 Report on Strong, Sustainable, Balanced, and Inclusive Growth illustrates how fiscal deficits in almost all G20 economies are projected to shrink next year, based on announced budgets and current policies…”
