IMF allocates record $ 650 billion to global economic recovery

The International Monetary Fund (IMF) has approved the allocation of additional reserve assets of the organization in the amount of $ 650 billion to help restore the global economy affected by the consequences of the pandemic. This follows from the widespread statements fund.

“On August 2, 2021, the IMF Executive Board approved the general allocation of Special Drawing Rights (SDR, the IMF’s unit of account, has a non-cash form, and its value is determined daily based on the market rates of major currencies) in an amount equivalent to $ 650 billion (approximately SDR 456 billion), to replenish the world’s liquidity resources, ”the document says.

The fund’s managing director, Kristalina Georgieva, explained that the allocation of these funds “will serve the benefit of all member states, help meet the long-term global need for reserves, build confidence and contribute to the resilience and stability of the global economy.” “This is a historic decision – the largest SDR allocation in the history of the IMF and a stimulus for the global economy during an unprecedented crisis,” she said.

The largest SDR allocation so far has been the $ 250 billion set aside in 2009 to deal with the aftermath of the global financial crisis. The good thing about the SDR allocation is that it is a form of “free” external reserves and does not imply any conditions on the part of the IMF, writes The Bell.

The foundation notes that the decision will take effect on 23 August. Funds will be transferred to member countries in proportion to quotas. At the same time, about $ 275 billion will go to “emerging market and developing countries, including low-income countries.”

If you count by current quotas The IMF, roughly proportional to the contribution of countries to the world economy, Russia will receive a little less than $ 18 billion, and China – about $ 40 billion.But developed countries will receive 58% of aid, and all the poorest – only 3%, all African countries – $ 33 billion.

Meanwhile, experts from non-governmental organizations believe that even $ 650 billion is not enough and the world economy needs $ 3 trillion in SDR. “Developing countries simply need more help to overcome the crisis,” said Eric LeComte, executive director of Jubilee USA Network. “The rich countries will still get most of the money and must pass it on to the poor.”

Kristalina Georgieva pointed out that more than half of the developing countries depleted their reserves during the crisis, and they cannot even count on access to particles from the trillions of dollars poured into developed economies in the context of the beginning of the curtailment of incentives.

In March, the IMF reported that the global economy is recovering faster than forecast. Such prospects in the fund were associated with additional budgetary stimulus, especially in the United States, and with the prospects for larger-scale vaccinations. However, in July, the IMF said that the rate of vaccination in the world is not sufficient to speak of the end of the pandemic in 2022.

At the end of July, the IMF revised forecasts for the growth of world economies. According to them, the global economy this year will grow by 6%, next – by 4.9%. The overall assessment for the current year has not changed, however, for developing countries, the forecast was lowered by 0.4 percentage points, to 6.3%, transfers RBC.

For Russia, the IMF has significantly raised its estimate of GDP growth this year – from 3.8% expected in April to 4.4%. In January, the fund expected it by only 3%. At the same time, the IMF downgraded the forecast for the growth of the Russian economy in 2022, lowering it to 3.1% instead of the April estimate of 3.8%.