At the G20 Meeting, COVID-19 Remains a Hot Topic: "Threat to the Global Economy... Need for Policy Coordination"

Held in Riyadh, Saudi Arabia on 22-23
IMF Managing Director: "Accommodative Monetary Policy and Active Fiscal Management Needed"

[Image source=EPA Yonhap News]

[Asia Economy Reporter Kim Hyunjung] The Group of Twenty (G20) member countries reaffirmed the seriousness of the novel coronavirus disease (COVID-19), which is spreading globally, and agreed to strengthen policy coordination to overcome uncertainties. The International Monetary Fund (IMF) Managing Director projected a weak recovery this year but identified the spread of COVID-19 as the biggest hindrance and suggested active fiscal management by each country.

According to the Ministry of Economy and Finance on the 24th, the G20, at the G20 Finance Ministers and Central Bank Governors Meeting held in Riyadh, Saudi Arabia on the 22nd and 23rd, shared the recognition that COVID-19 is a new and significant threat to the global economy and agreed to continuously coordinate macroeconomic policies to overcome it.

At the meeting, Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki introduced the Korean government's response to support those affected and minimize economic ripple effects, then urged proactive, swift, and accurate international cooperation at the G20 level to ensure that this crisis does not delay the global economic recovery.

IMF Managing Director Kristalina Georgieva, who attended the meeting, forecasted a weak recovery of the global economy this year but pointed to COVID-19 as a factor that could hinder it. She emphasized, "The spread of COVID-19 is emerging as the most urgent uncertainty factor and will impede the global economic recovery," adding, "The impact on the global economy will depend on whether the situation is resolved early." She further stated, "Policy coordination among G20 countries is important to respond to such uncertainties," and proposed, "It is necessary to continue a macro policy mix including accommodative monetary policy and active fiscal management." G20 member countries agreed with this outlook and diagnosis and shared the view that continuous policy coordination among G20 countries is necessary.

This meeting was the first finance ministers' meeting hosted by Saudi Arabia, the G20 chair country this year, attended by finance ministers and central bank governors of the 20 countries and invited nations, as well as representatives from major international financial institutions such as the IMF, Organisation for Economic Co-operation and Development (OECD), World Bank (WB), and Financial Stability Board (FSB). At this meeting, infrastructure-related technology investment was selected as a priority task under the 'High-Quality Infrastructure Principles' established last year, and the agreement reached at the January IF General Assembly regarding digital taxation was officially approved. The schedule to finalize the digital tax agreement policy by July this year was also reaffirmed.

Deputy Prime Minister Hong expressed concern over the persistent trade tensions at this meeting and emphasized efforts to restore global value chains. He also mentioned director Bong Joon-ho’s Academy Award-winning film Parasite to call for joint international efforts to promote inclusive growth and improve access to opportunities.