IMF Says Governments Can Offer 'Cash Transfers, Wage Subsidies, Tax Relief to Combat Coronavirus

Given the international economic linkages, the argument for a coordinated, international response is clear, says IMF's chief economist

Washington: Government policymakers will need to implement “substantial" targeted fiscal, monetary and financial market measures to combat the economic impact from the rapidly spreading coronavirus, International Monetary Fund chief economist Gita Gopinath said on Monday.

In a blog posting on the IMF’s website, Gopinath said her top recommendations involved putting cash directly into the hands of households and businesses. Broad interest rate cuts may instill confidence but would be effective in stimulating activity only once business conditions normalize, she added.

Given the "acute shocks" caused to economies, consumers and businesses, Gita Gopinath said "policymakers will need to implement substantial targeted fiscal, monetary, and financial market measures to help affected households and businesses."

That includes "cash transfers, wage subsidies and tax relief," as well as interest rate cuts and financial market support by central banks.

Given the international economic linkages, "the argument for a coordinated, international response is clear," she said.