Xinhua News Agency, Washington, August 2nd. The International Monetary Fund (IMF) stated on the 2nd that due to the impact of the new crown epidemic, the scale of global current account imbalances in 2020 will increase from the previous year, and it is expected that the scale of imbalances will further expand this year.
The IMF released the “2021 External Risk Report” on the same day, saying that the sharp fluctuations in the global current account deficit and surplus in 2020 are due to the four major trends caused by the new crown epidemic: tourism and travel have fallen sharply, oil demand has plummeted, medical supplies trade has surged, and household consumption has increased. Services shifted to consumer products.
The report pointed out that these factors have led to the expansion of current account deficits in some countries and the expansion of current account surpluses in some countries. In addition, the epidemic has also caused the government to raise funds for medical services and provide financial support for households and businesses through large-scale debt, which also has a huge and uneven impact on the trade balance.
The report said that the global current account balance as a proportion of global gross domestic product (GDP) rose from 2.8% in 2019 to 3.2% in 2020. As the epidemic is still raging in many parts of the world, it is expected that the global current account balance will further expand in 2021, but it will gradually narrow from 2022, and will drop to 2.5% of global GDP by 2026.
The report pointed out that ending the epidemic around the world is the only way to ensure the recovery of the global economy and prevent the recovery of countries from further fragmentation. This requires the joint efforts of all parties to help relevant countries obtain funding for vaccination and maintain their medical and health services. At the same time, countries should work hard to resolve trade and technological disputes. The top priority is to gradually remove tariff and non-tariff barriers, especially those on medical supplies.
The IMF has issued an “External Risk Report” every year since 2012, which analyzes and evaluates the external imbalances and exchange rates of 29 major economies in the world, including the United States, China, Germany, and Japan, and the Eurozone as a whole.