Maintaining the global recovery momentum can be done through a calibrated, planned, and well-communicated exit strategy.
An exit strategy to support recovery or securing a stable exit point from the pandemic is a priority for policy makers worldwide, Governor of Bank Indonesia Perry Warjiyo said during an event here on Thursday.
"When recovery is underway, several nations head toward policy normalization sooner than others," he noted during the opening of the first G20 Finance Ministers and Central Bank Governors Meeting.
"Their monetary policy adjustment along with stimulus withdrawal affects the global economy," Warjiyo said.
This also potentially creates a more stringent global financial situation and can cause capital outflow from developing countries' markets, he pointed out.
Therefore, Indonesia will discuss this condition in the exit strategy agenda during its G20 Presidency, he said.
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Specifically, it will discuss how the G20 can maintain global recovery momentum in view of the negative spillover that comes from misaligned exit strategies and differences in the pace of policy normalization, he informed.
"Maintaining the global recovery momentum can be done through a calibrated, planned, and well-communicated exit strategy," Warjiyo remarked.
Moreover, the COVID-19 pandemic has caused deep global economic disruptions, both in terms of supply and demand, he noted.
These disruptions comprise high unemployment, weak investment, and low productivity, he said.
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If they are not handled well, they would certainly leave a lasting scar and could halt recovery as well as advancement toward a strong and resilient economic growth, he cautioned.
To this end, the other urgent priority is to handle the risks that come from the economic bruise as a result of the pandemic, he added.
According to Warjiyo, all of these problems will be covered by the six priority agendas of the Finance Track of Indonesia's G20 Presidency.
The agendas comprise exit strategy to support recovery, handling bruise to secure future growth, payment system in the digital era, sustainable finance, financial inclusion, and international taxation, he said.
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