(Bloomberg) -- Global finance chiefs and central bankers pledged to maintain an “extraordinary and agile” policy response to a coronavirus pandemic that threatens to leave long-lasting scars on the world economy.
The International Monetary and Financial Committee, the main advisory body to the International Monetary Fund, committed to using all available tools to support jobs and growth, according to a statement on Thursday issued as part of the fund’s annual meetings being held virtually this year.
While the group said that a tentative global economic recovery is under way, it backed the IMF continuing to explore additional tools to help member nations.
“We will sustain our extraordinary and agile policy response, tailored to the different stages of the crisis and country-specific circumstances,” according to the statement. “We commit to using all available policy tools, individually and collectively, to restore confidence, jobs, and growth.”
The communique comes on the heels of the IMF’s updated economic outlook, which warned that countries still face an uneven recovery until the virus is tamed. It also follows a move on Wednesday by the richest nations to renew a debt-relief initiative for the poorest through at least the first half of 2021, which fell short of a World Bank call for a full-year extension.
As U.S. lawmakers remain at odds over additional fiscal stimulus, IMF Managing Director Kristalina Georgieva said at a news conference on Thursday that America’s fiscal and monetary actions to date have helped not only the globe’s largest economy, but other nations as well.
“Luckily for the U.S. it has fiscal space and it also has monetary policy capacity,” she said. “It is deploying both. The exact sequencing of how it is being done of course is for the U.S. authorities, but it has been an important, positive impulse and we would like to see how it would be continued.”
The IMF forecasts the U.S. economy to grow 3.1% next year, but that doesn’t factor in additional fiscal aid. If there were to be a stimulus of about the same size as the $2.2 trillion package passed in March, it could add about 2 percentage points to U.S. growth next year, IMF chief economist Gita Gopinath said in an email Thursday.
The rebound in China, the world’s second-largest economy, is also providing a positive impulse for the rest of the globe, Georgieva said. China remains the lone major economy that the IMF sees growing this year, estimated to expand 1.9% in 2020 and 8.2% in 2021.
The fund sees global output by the end of 2021 being 0.6% higher than at the end of 2019, almost entirely driven by China.