Speech

Opening Remarks by Kristalina Georgieva at IFF Beijing

June 1, 2021

Good morning [Zao Shang Hao!]. I would like to thank the International Finance Forum for inviting me to this important event starting your Spring Meetings.

The IMF and IFF are connected by our global perspective and by fostering financial stability and sustainable growth.

The theme of my today’s remarks is “Only when all contribute their firewood can they build up a big fire (众人拾柴火焰高).”

First, let’s look at the economic picture.

We recently lifted our global growth forecast to 6 percent in 2021 and 4 percent in 2022— as people adapt to new ways of working, as vaccines are administrated, and as policy support continues. The growth picture is brighter.

Exceptional policy measures have prevented a much worse outcome. Without them, the global contraction last year would have been three times worse.

Also, we did not have another Global Financial Crisis—partly because we had worked together over the past decade to make banking systems more resilient.

For China, the growth forecast has increased to 8.4 percent this year due to stronger net exports. And we project that China will contribute on average more than one-quarter to global growth through 2026.

So yes, the global recovery is underway—but the paths and pace are diverging dangerously. A small number of advanced and emerging market economies are powering ahead—while poorer countries are falling behind, mainly due to limited policy space and vaccine availability.

We face high uncertainty until this pandemic truly ends. More than a year into this crisis, new cases globally are higher than ever.

This brings me to my second point: policymakers must take the right actions now by giving everyone a fair shot at the vaccine, recovery, and future.

First, we must vaccinate at least 40 percent of the population of all countries by end-2021, and at least 60 percent by mid-2022. To get there, we need a comprehensive plan—with upfront financing, upfront vaccine donations, and more investment to insure against downside scenarios.

IMF staff estimate that such a plan will cost around $50 billion Its benefits are overwhelming—faster vaccination can result in higher global output of $9 trillion between now and 2025. This would be the highest return on public money in modern history!

Pandemic policy is now the best economic policy. Here, China’s efforts are commendable—by making vaccine supplies available abroad while keeping up the accelerated pace of vaccination at home.

Second, we must safeguard the recovery through a careful transition to cushion the impact on workers with income support and labor market policies. We should further support viable firms but also limit insolvency scars by implementing effective bankruptcy and restructuring frameworks.

Third, we must give everyone a fair shot at the future.

Investing in digital infrastructure can boost productivity and income. And countries such as China have shown that promoting e-commerce and fintech broaden access to financial services and harness innovation and creativity.

A transition to the new climate economy is critical to avoid widespread economic and financial disruption. China’s target of net zero emissions by 2060 shows important leadership and underlines the global consensus. Climate action is also an opportunity. And IMF research shows that green infrastructure investment with carbon pricing could boost global GDP by 7 percent annually over the next 15 years—and create millions of jobs.

Here, the financial sector will be key. By using price signals and regulatory incentives, countries can foster more private-sector green financing and harmonize standards and disclosures.

This brings me to my final point: We are all in the same boat.

We are in this together. This interdependence is our strength, and we see a renewed support for multilateral efforts: from vaccines, climate action, to modernizing international corporate taxation.

We need the same spirit now to further support the most vulnerable countries—in their efforts to mobilize domestic revenue, but also through more concessional financing and help to deal with debt.

In this area, China plays an important role—by participating in the G20 Debt Service Suspension Initiative and in the Common Framework for orderly debt restructuring, and by supporting the IMF’s concessional lending facilities.

The IMF has leaned into this crisis with full force, including over $110 billion in new financing for 86 countries. Now our membership is supporting an unprecedented allocation of Special Drawing Rights of $650 billion, which will boost all members’ ability to face adverse shocks.

At this pivotal moment, we must all contribute to nurturing the flame of recovery to ensure a brighter and more prosperous future for all.

Thank you. Xièxiè