The Future of Asia: What a Difference a Year Can Make

By Chang Yong Rhee and Katsiaryna Svirydzenka The Sydney Opera resumed live performances and the city of Melbourne recently hosted the Australian Open tennis tournament with fans (mostly) in attendance. Japan is back to planning the delayed 2020 Summer Olympics, while China focuses on the Beijing 2022 Winter Games. Having been hit by COVID-19 first, […]

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The Great Divergence: A Fork in the Road for the Global Economy

By Kristalina Georgieva As G20 finance ministers and central bank governors meet virtually this week, the world continues to climb back from the worst recession in peacetime since the Great Depression. The IMF recently projected global GDP growth at 5.5 per cent this year and 4.2 per cent in 2022. But it is going to […]

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Chart of the WeekThe Pre-Pandemic Debt Landscape—and Why It Matters

By Xuehui Han, Paulo Medas, and Susan Yang Many countries entered the pandemic with elevated debt levels. Our new update of the IMF’s Global Debt Database shows that global debt—public plus private—reached $197 trillion in 2019, up by $9 trillion from the previous year. This substantial debt created challenges for countries that faced a debt […]

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A Long, Uneven and Uncertain Ascent

By Gita Gopinath The COVID-19 pandemic continues to spread with over 1 million lives tragically lost so far. Living with the novel coronavirus has been a challenge like no other, but the world is adapting. As a result of eased lockdowns and the rapid deployment of policy support at an unprecedented scale by central banks […]

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Reform of the International Debt Architecture is Urgently Needed

By Kristalina Georgieva, Ceyla Pazarbasioglu, and Rhoda Weeks-Brown The COVID-19 pandemic has pushed debt levels to new heights. Compared to end-2019, average 2021 debt ratios are projected to rise by 20 percent of GDP in advanced economies, 10 percent of GDP in emerging market economies, and about 7 percent in low-income-countries. These increases come on […]

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COVID-19 Response in Emerging Market Economies: Conventional Policies and Beyond

By Martin Mühleisen, Tryggvi Gudmundsson, and Hélène Poirson Ward The economic impact of the COVID-19 pandemic on emerging market economies far exceeded that of the global financial crisis. Unlike previous crises, the response has been decisive just like in advanced economies. Yet, conventional policies are reaching their limit and unorthodox policies are not without risks. […]

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Toward a More Resilient Europe

By Poul M. Thomsen Europe, like the rest of the world, faces an extended crisis. An element of social distancing—mandatory or voluntary—will be with us for as long as this pandemic persists. This, coupled with continued supply chain disruptions and other problems, is prolonging an already difficult situation. Based on updated IMF projections released last […]

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Financial Conditions Have Eased, but Insolvencies Loom Large

By Tobias Adrian and Fabio Natalucci Amid the human tragedy and economic recession caused by the COVID-19 pandemic, the recent surge in risk appetite in financial markets has caught analysts’ attention. After sharp declines in February and March, equity markets have rallied back, in some cases to close to their January levels, while credit spreads have narrowed significantly, […]

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