The International Monetary Fund (IMF) is committed to continuing to help companies affected by the pandemic, but that are viable in the future, and to relieve some of the public effort, it suggests temporarily raising taxes on companies that have “excessive” profits. In one of the documents presented during the first day of its spring meeting, and related to the debts and challenges facing the private sector, the IMF also recommends that governments “calibrate the pace of their fiscal consolidation”. Thus, he understands that the most recovered economies can begin to reduce aid “faster”, but warns that those who are not at that point may still suffer disturbances and long-term problems.
In this report, the Fund outlines ways in which governments can help companies affected by the pandemic. Thus, it considers that such support should be limited to circumstances in which there has been a “market failure” but also warns that in the sectors hardest hit by the pandemic, which can drag the rest of the economy, it is better to encourage restructuring or the reconversion. After acknowledging that deciding which are the businesses with the possibility of being viable to help is complicated, the Fund recommends that governments study the possibility of temporarily raising taxes on companies in order to “reduce the burden” of public aid. that have “excessive” benefits. “This would help recover some of the transfers” that have been given to firms that “did not need them,” the document adds.
unequal impact
In any case, the report recalls that the impact of the pandemic on the financial status of households and companies has been uneven around the world, and also depends a lot on the economic composition by sector of each country. Services provided in person fell while the production and exports of goods and services that substitute face-to-face services have improved.
In addition, the tourism and hospitality labor market has still not recovered two years after the pandemic, while on the opposite side, logistics and construction have seen their working conditions improve, especially wages. The war in Ukraine has also affected supply chains and energy and food prices to a greater extent, the rise in prices of which will also affect the capacity of households.
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