Development Committee - Statement by the Managing Director of the International Monetary Fund - April 2021

Jul 19, 2026

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The IMF Managing Director’s written statement for the Development Committee outlines the global economy’s recovery after the most severe synchronized contraction since World War II. It highlights near-term prospects supported by fiscal and monetary support and vaccinations, while emphasizing substantial uncertainty from COVID-19 variants and uneven vaccine access, especially in emerging markets and low-income countries. The statement calls for urgent action to expand affordable vaccines, increase grants and concessional lending, and support highly indebted nations, while also integrating climate mitigation and financing into IMF surveillance and lending.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages7

Reading Time18 min

Development Committee: The Managing Director's Written Statement

April 2021

Economic Outlook and Risks

Public Disclosure Authorized Public Disclosure Authorized DEVELOPMENT COMMITTEE (Joint Ministerial Committee of the Boards of Governors ofthe Bank and the Fundon the Transfer of Real Resources to Developing Countries) DC/S/2021-0024 April 7, 2021 STATEMENT BY THE MANAGING DIRECTOR OF THE INTERNATIONAL MONETARY FUND Attached for information for the Members of the Development Committee is a Statement from the Managing Director of the International Monetary Fund, Ms. Kristalina Georgieva for the Committee’s one hundred and third meeting to be held virtually on April 9, 2021. DEVELOPMENT COMMITTEE: THE MANAGING DIRECTOR'S WRITTEN STATEMENT April 2021 Following the most severe and synchronized contraction since World War II, the global economy has entered into a recovery, buoyed by unprecedented fiscal and monetary support and vaccinations. The short-term outlook is subject to large risks, however, including uncertainty about the effectiveness of vaccines to newstrains ofthe COVID-19 virus. Further, many emerging markets and developing economies (EMDEs) have little prospect of access to widespread vaccinations before mid-2022. Low-income developing countries (LIDCs)—a sub-group of EMDEs—face an acute risk of long-term scarring, i.e., persistently lower potential output and a large increase in poverty. Urgent action from the international community is needed to prevent such an outcome, including by (i) helping ensure easier, more affordable and faster access to vaccines, (ii) increasing grants and concessional loans to allow LIDCs fund the most critical spending needs, and (iii) assisting countries that struggle with high public debt levels. Beyond policy priorities related to the Covid-19 crisis, a redoubling of efforts is needed to reduce greenhouse gas emissions, and many EMDEs need access to more climate financing. The IMF is contributing to these efforts by inter alia scaling up concessional lending, providing debt service relief, supporting G20 initiatives to facilitate debt workouts, preparing a new general SDR allocation, and integrating climate change firmly into its surveillance framework. ECONOMIC OUTLOOK AND RISKS 2020 was an exceptionally difficult year for the world economy. Vaccinations and policy support hold the prospect for a recovery in 2021. The global economy is emerging from one of the sharpest and most synchronized recessions in living memory. In the past 15 months, the COVID-19 pandemic has caused large losses of human lives, upended livelihoods, and interrupted economic activity, as countries imposed restrictions on mobility to combat the spread of the virus. Overall, the world economy shrank by 3.3 percent in 2020, the largest peacetime contraction since the Great Depression. The outcome would have been much worse, however, had governments and central banks not stepped in with unprecedented policy support, much of which has been targeted to benefit the most vulnerable households and firms. According to estimates in the World Economic Outlook (WEO), policy interventions lessened the pandemic’s impact on global growth by about 6 percentage points, thus preventing an even more catastrophic collapse in output. The emergence of COVID-19 vaccines has provided a boost to public sentiment. With vaccinations underway in several parts of the world, in particular advanced economies, countries are cautiously beginning to ease restrictions. Short-term prospects are boosted further by the announcement of additional, sizeable fiscal support in the United States, the euro area and Japan (among other countries) . Exceptional uncertainty looms over the outlook. Emerging marketsand developing economies face an uphill battle... with lowincome developing countries in an especially vulnerable position, reflecting inter alia high debt levels. Overall, the global economy is projected to grow at 6 percent in 2021—an upward revision of 0.8 percentage point compared to the forecast in th

FAQs

What are the statement’s main reasons the global economy could recover in 2021?

The statement attributes recovery prospects to unprecedented fiscal and monetary support and the rollout of COVID-19 vaccines, alongside easing of restrictions in some countries. It also cites additional sizeable fiscal support announced in major economies.

What key risks could slow or derail the recovery?

The statement highlights uncertainty about vaccine effectiveness against new virus strains and delayed vaccination in many EMDEs. It also warns that premature withdrawal of policy support and prolonged unemployment and disruptions could scar longer-term growth.

What actions does the statement recommend for low-income developing countries and highly indebted nations?

It calls for easier, more affordable, and faster vaccine access, along with increased grants and concessional loans to fund critical spending. It also urges assistance for countries facing high public debt levels, including measures such as debt service relief and support for debt workouts.

Jul 19, 2026

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