IMF: COVID-19 Creates Highest GDP Deficit Since World War II

According to the International Monetary Fund (IMF), countries need to consider implementing "difficult reforms" in commodity, labor and financial markets to close the $ 15 trillion (63.6 trillion ringgit) global production gap caused by the Covid-19 crisis. ,

“The same funds that are being invested in vaccinations and plans for recovery spending must also be invested in growth measures to make up for this lost production,” said IMF First Deputy Managing Director Jeffrey Okamoto in a blog post on the Washington-based fund's website.

"The monetary and fiscal stimulus that is still in place will serve as a springboard to a brighter, more sustainable future, not a crutch to a weaker version of the pre-Covid-19 economy."

Since March 2020, Governments have spent $ 16 trillion (Ringgit 67.8 trillion) on financial support since March 2020, Okamoto said, and central banks have increased their balance sheets totaling $ 7.5 trillion (Ringgit 31.8 trillion).

The deficit is the highest since World War II, and central banks provided more liquidity in the past year than in the last 10 years combined, all of which were "absolutely necessary," he said.