The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, has welcomed the G20’s support for the historic agreement on a minimum corporate tax rate.
In a statement released on Sunday after the G20 finance ministers and central bank governors’ meeting concluded, she added: “This will help countries maintain their corporate tax base and mobilize revenue by ensuring that highly profitable companies everywhere pay their fair share. ”
She praised the G20 for its focus on climate risks and the role of carbon pricing mechanisms. It intended to pursue a proposed international carbon floor that could significantly accelerate the transition of the world economy to low-carbon growth.
Recognizing the urgent need to be better prepared for future health threats, the G20 welcomed the report by the High Level Independent Panel on Funding for the Global Commons for Pandemic Preparedness and Response, in which it pledged to work with international financial institutions and relevant partners to achieve Develop proposals for sustainable funding to strengthen preparedness and response to future pandemics.
“I would also like to express my deep appreciation for the support of the G20 and our members for a new Special Drawing Right (SDR) allocation of $ 650 billion – the largest in IMF history and a shot in the arm for the world “, she said.
On the global economy, she said the recovery continues, broadly in line with the IMF’s April forecast of 6 percent global growth this year. But the divergence between economies is worsening. Essentially, the world is facing a two-pronged recovery, she said.
She said the pandemic remains the fundamental risk to the world in the face of a dangerous wave of a highly transmissible variant that is now sweeping across the world, adding that urgent action is needed in three key areas.
“First, speed up vaccinations: cover at least 40 percent of the population in each country by the end of 2021 and 60 percent of the population by mid-2022. Second, implement sound macroeconomic policies: they continue to play a central role in ensuring recovery, ”she said.
She suggested that fiscal policy should provide well-designed support tailored to the country’s circumstances to protect the most vulnerable and minimize scars. She said monetary policy should remain accommodating as inflationary pressures are likely to be temporary.
Third, stepping up support for countries at risk, she said. The IMF’s new $ 650 billion SDR allocation will increase countries’ reserves, create additional space for vaccine funding and increase confidence in the recovery. “To increase the impact of the allocation, we will quickly look for options for economically stronger members to voluntarily use their SDRs to help poor and vulnerable countries,” she added.
“The increase in the IMF’s Poverty Reduction and Growth Trust (PRGT) is a proven option that will enable us to provide interest-free financial support to low-income countries in the medium term. We are also examining the possibility of creating a new resilience and sustainability trust for members at risk in order to move forward better, including by financing greener, more resilient and more sustainable growth in the medium term, ”the IMF chief continued.