The Strategist

IMF head will propose to set aside $650B in reserve assets for global economic recovery

03/24/2021 - 05:28

By June, International Monetary Fund (IMF) Managing Director Kristalina Georgieva will make a formal proposal to the fund's executive board to create $650 billion in reserve assets to help the world recover from the coronavirus pandemic.

Ms. Georgieva called the preliminary discussion "very encouraging."

"I intend to submit a formal proposal for a new allocation of $650 billion to the board of governors by June," the IMF chief said in a statement.

The IMF will develop new measures to make the allocation more transparent. The fund will also examine options for reallocating funds "for members with sound financial positions to support vulnerable and low-income countries".

The IMF believes the global economy could grow by 5.5% in 2021 after a 3.5% decline in the past. Its experts expect the economic recovery to begin in the second quarter. This will be aided by new government support programs, primarily in the U.S.