The World’s Economy Has Begun to Recover

The World’s Economy Has Begun to Recover – Since the corona pandemic, many declines have occurred, including the world’s economy. Not only developing countries are affected, but also developed countries. But now, the world’s economy is starting to show signs of recovery.

As for the economic recovery in developed countries, one of which is the United States (US), it can be seen from the plan to reduce fiscal stimulus, monetary and financial sectors.

The World's Economy Has Begun to Recover

1. The tapering of the Fed is proof of an unbalanced global economic recovery

According to Perry, the condition of economic recovery in developed countries, such as the US is evidenced by the plan of the US Central Bank or the Federal Reserve (The Fed) to reduce its monetary stimulus, such as plans to increase interest rates and also reduce bond purchases.

“In monetary policy, a number of developed countries, including the US Central Bank, have planned to change their policies, which we often call Fed Tapering. Likewise in other developed countries,” said Perry.

2. Developed countries also plan to reduce credit stimulus

Not only that, according to Perry, many developed countries have begun to reduce their credit stimulus. In fact, the stimulus is still needed in developing countries.

“Developed countries have also planned to reduce the easing of policies in the financial sector that have been carried out so far, such as easing credit and financing arrangements, while we still need them,” he said.

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3. Reducing stimulus could have an impact on developing countries

According to Perry, plans to reduce fiscal, monetary and financial sector policies in developed countries could have a negative impact on the economies of developing countries. Therefore, this coordination of monetary, fiscal and financial sector policies needs to be discussed at the 2022 G20 meeting held in Indonesia.

Perry said this topic had been prepared in one of the financial track meetings with the theme ‘Coordination on monetary policy and the financial sector to support joint economic recovery’.

“Coordination at the G20 level needs to be well planned, calculated, and communicated. So that we can recover together to support economic recovery, and eliminate unwanted impacts on developing countries,” he said.