It took 5 years to recover the global economy

WASHINGTON, iNews.id – Pandemic Covid-19 provide an economic blow that almost all countries in the world have never felt before. Various sectors have not escaped the impact of the policy to limit activities since the beginning of this year, such as experienced by the aviation, tourism and energy industries.

Chief Economist World Bank Carmen Reinhart said, economic recovery world from the effects of the current crisis will take up to five years. The huge impact of the crisis due to Covid-19, said Reinhart, would make the global poverty rate rise to its highest level for the first time in twenty years.

“There may be potential for a quick rebound as all activity restriction policies begin to be loosened or even lifted, but it is important to note that a full world economic recovery will take up to five years,” Reinhart said, quoted by Reuters on Thursday (17/09/2020 ).

He said the recession due to a weakening economy would last longer in some countries than in other countries. This will exacerbate inequality, as the poorest groups will be even more affected by restrictions on access, cessation of activities and limited health services.

Meanwhile, the International Monetary Fund (IMF) last week warned that the crisis caused by the coronavirus was far from over, making a full global economic recovery unlikely in 2021. This underscores the need for multilateral cooperation to ensure adequate supplies even after the corona vaccine was developed.

In an essay published by Foreign Policy magazine, IMF Managing Director Kristalina Georgieva and Chief Economist Gita Gopinath said that economic recovery from crisis requires the scale of support from the government and central bank quickly, with extraordinary policies that have never been before.

“The current recovery is still very fragile and uneven in all regions and all sectors. To ensure that the recovery continues, it is important that government and central bank support is not withdrawn too early, ”Georgieva and Gopinath wrote in the essay.

The IMF estimates that the total cost of dealing with the crisis caused by the Covid-19 pandemic will reach 12 trillion US dollars (Rp178,180 trillion) by the end of 2021. Meanwhile, low-income countries are likely to need further support for recovery costs.

Editor: Ranto Rajagukguk