The International Monetary Fund is committed to continuing to help companies affected by the pandemic, but it is viable in the future, and to relax some of the public efforts it is proposing to temporarily raise taxes on companies with “excessive” profits.
In a document presented today, during the first day of the Spring Meetings on debt and private sector challenges, the IMF is also recommending that governments “calibrate the pace of their fiscal consolidation.”
The foundation led by Kristalina Georgieva believes that economies with greater recovery can start reducing aid “quicker”, but warns of long-term problems in cases where those conditions are not yet met.
In the report, the IMF proposes ways in which governments can help companies affected by the pandemic, bearing in mind that support should be limited to conditions in which there have been “market failures”.
However, he also warns that in the sectors hardest hit by the pandemic, it is best to encourage restructuring or re-transformation.
After acknowledging that deciding which companies to help is complex, he suggests that, in order to “lighten the burden” of public assistance, governments consider the possibility of temporarily increasing taxes on companies with “excessive” profits.
“This will help recover some of the transfers” that were given to businesses that “didn’t need them,” the document adds.
The report also notes that the impact of the pandemic on the financial situation of families and businesses has been uneven globally and also depends a lot on the economic makeup by sector for each country.
The labor market in tourism and hospitality has not recovered two years after the outbreak of the epidemic, while the logistics and construction sectors have seen improved working conditions, especially wages.
The war in Ukraine has also affected supply chains and energy and food prices to a large extent, and an increase in their prices will also affect the capacity of families.