IMF's Gita Gopinath bats for fiscal stimulus to revive global economies
The IMF chief economist said that fiscal policy must play a leading role in the economic recovery by creating demand through cash transfers to support consumption and large-scale investment in medical facilities, digital infrastructure and environmental protection
- Nov 3, 2020,
- Updated Jan 29, 2021 12:18 PM IST
Gita Gopinath, chief economist of the International Monetary Fund (IMF), has pitched for fiscal stimulus to mitigate the economic impact of coronavirus crisis, citing the pandemic has pushed the global economy in a liquidity trap.
Gopinath highlighted that central banks across the world have taken strong measures to improve liquidity situation and have brought down policy interest rates aggressively, leaving little space for further easing if another shock strikes.
"For the first time, in 60 per cent of the global economy -- including 97 per cent of advanced economies -- central banks have pushed policy interest rates below 1 percent. In one-fifth of the world, they are negative," Gopinath wrote in an article in the Financial Times on Monday.
All emerging market and developing economies, excluding China, are expected to contract this year, IMF said.
Gita Gopinath, chief economist of the International Monetary Fund (IMF), has pitched for fiscal stimulus to mitigate the economic impact of coronavirus crisis, citing the pandemic has pushed the global economy in a liquidity trap.
Gopinath highlighted that central banks across the world have taken strong measures to improve liquidity situation and have brought down policy interest rates aggressively, leaving little space for further easing if another shock strikes.
"For the first time, in 60 per cent of the global economy -- including 97 per cent of advanced economies -- central banks have pushed policy interest rates below 1 percent. In one-fifth of the world, they are negative," Gopinath wrote in an article in the Financial Times on Monday.
All emerging market and developing economies, excluding China, are expected to contract this year, IMF said.