On 14 July, JVI hosted the fourth of a series of six webinars focusing on the recent IMF special series on fiscal policies to respond to the COVID-19 challenges.

The COVID-19 pandemic severely affected countries across the globe, with oil exporting countries from the CESEE and CCA region simultaneously hit by the collapse of oil prices. Trade disruptions and containment measures affected economic sectors asymmetrically. The IMF Fiscal Monitor in its April 2020 issue recommended targeted fiscal measures for affected workers and businesses during the emergency response, as well as broad-based stimulus in line with countries’ financing abilities for recovery. The majority of countries responded with a strong fiscal stimulus, estimated (in June) at $10 trillion globally, of which $4.4 trillion in foregone revenue and spending measures.

However, challenges remain regarding the need to ensure the effectiveness of expenditure policies in mitigating the economic and social impact of the pandemic. Baoping Shang and Delphine Prady discussed important aspects such as

• What expenditure measures are recommended in order to provide liquidity support for businesses and preserve employment?
• Should measures supporting households be targeted or rather universal? 
• And how can the informal sector be reached effectively?

Drawing on the recent IMF special series on fiscal policies to respond to the COVID-19 challenges, the panelists discussed the general principles and design of policy responses, including temporary universal transfers. Challenges and good practices, in particular with regard to reaching the informal sector, were shared with the audience. The presenters emphasized that much depended on the initial social protection coverage and instrument mix as well as shock responsiveness when trying to find an adequate balance between generosity and inclusiveness. However, the capacity to reach households, through universal ID systems, integrated socio-economic data, and safe and transparent delivery infrastructure (the ‘trinity of reachability’) remains an important gap to be addressed by many emerging market economies.

“Expenditure Policies in Support of Firms and Households” (English / Russian) 

“Managing the Impact on Households: Assessing Universal Transfers” (English / Russian)

“Reaching Households in Emerging and Developing Economies: Citizen ID, Socioeconomic Data, and Digital Delivery” (English / Russian)

Thomas Richardson, JVI Director, and David Coady, Head of the Expenditure Policy Division of the IMF's Fiscal Affairs Department opened the webinar.

Moderation was provided by Barbara Dutzler and Tatiana Evdokimova (both JVI).

Barbara Dutzler, Senior Economist, JVI