IMF: Premature withdrawal of policy support could lead to worse outcomes in global economy

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A premature withdrawal of policy support could lead to worse outcomes in the global economy, Gita Gopinath, the Chief Economist of the International Monetary Fund (IMF), said on Tuesday, as reported by Reuters.

Additional takeaways

“The economic crisis in 2020 remains the worst peacetime global contraction since the Great Depression.”

“The global economy may exit the crisis with less scarring than feared if vaccines and therapies remain effective against COVID-19.”

“The world likely to see an increase in bankruptcies when pandemic measures are withdrawn, which could have an impact on fragile banking systems.”

“Debt levels are at record highs in many countries, important for all countries to have medium-term plans that ensure debt remains stable.”

Market reaction

These remarks don’t seem to be affecting the market sentiment. As of writing, the S&P 500 Futures were up 0.07% on the day at 3,851.

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