WASHINGTON, USA – A key lesson from the 2008 global financial crisis was that governments should not remove stimulus measures too soon, International Monetary Fund (IMF) chief Kristalina Georgieva said on Monday, June 15.
“Please spend, spend as much as you can. But keep the receipts,” Georgieva said during a fireside chat.
“We should be very careful not to withdraw support too quickly,” she warned. “Remember we did it after the global financial crisis, and that had unintended negative consequences for quite some time.”
The IMF chief again noted that the world economy is facing the first truly global crisis since World War II, that will cause the fund to downgrade growth estimates for many economies.
“For a majority of countries we will be revising projections downwards. For a small number of countries, we will be revising upwards,” she said during the virtual panel organized by GLOBSEC, Institute Montaigne (IM), and Bruegel think tanks.
The IMF’s updated World Economic Outlook is due out June 24.
Georgieva praised governments for the “massive fiscal measures” totaling about $10 trillion – compared to just $1 trillion in the wake of the global financial crisis.
But the recovery “cannot be carried out without growth or effort.” – Rappler.com