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Mrs. Swarnali A Hannan, Ms. Keiko Honjo, and Mr. Mehdi Raissi

essential to ensure any future costs are minimized, including to safeguard the intertemporal sustainability of pension and insurance funds. Support to firms Supporting viable 5 firms, particularly small- and medium-sized enterprises (SMEs), could take two general forms: (i) liquidity support; and (ii) cost-reduction assistance. Options for liquidity support include tax and social security contribution deferrals; accelerated payments — expedited processing of VAT refunds; and clearing public sector arrears to all suppliers (if needed, prioritize those

Mrs. Swarnali A Hannan, Ms. Keiko Honjo, and Mr. Mehdi Raissi
Mexico’s fiscal response to the pandemic has been modest compared to its peers, reflecting the authorities’ desire to not issue new debt for spending. This approach, however, risks a more severe recession and a weaker economic recovery, with further costs in the future. Balancing the need for stronger near-term fiscal support for the people and the recovery against medium-term discipline, this paper lays out an alternative strategy. We show that credibly announcing a pro-growth and inclusive medium-term fiscal reform upfront—including increased tax capacity, higher public investment and strengthened social safety nets—would open space for larger short-term support and close medium-term fiscal gaps. Model simulations suggest that this package would boost output, limit lasting economic damage from the pandemic, and put debt trajectory on a declining path in the medium term as tax reforms pay off and risk premia decline.
Chang Yong Rhee and Katsiaryna Svirydzenka

Liquidity Support Temporary tax and social security contribution deferrals ✔ ✔ ✔ ✔ ✔ ✔ Temporary loan moratorium ✔ ✔ ✔ ✔ ✔ ✔ Government loan guarantee ✔ ✔ ✔ ✔ ✔ ✔ Subsidised lending 2 ✔ ✔ ✔ ✔ ✔ ✔ Solvency Support Tax relief ✔ ✔ ✔ ✔ Equity injections 3 ✔ ✔ ✔ ✔ Wage subsidies ✔ ✔ ✔ Major grants ✔ ✔ Source: IMF staff survey based on authorities’ public announcements. Note: Table uses

Changyong Rhee and Katsiaryna Svirydzenka
The Asia-Pacific region was the first to be hit by the COVID-19 pandemic; it put a strain on its people and economies, and policymaking became exceptionally difficult. This departmental paper contains the assessment of the key challenges facing Asia at this critical juncture and policy advice to the region both to address the current challenges and to build the foundations for a more sustainable and inclusive future. The paper focuses on (1) adjusting to the COVID-19 shock, (2) using unconventional policies when policy space is limited, (3) dealing with debt, and (4) helping the vulnerable and greening the recovery. The paper first presents the different ways countries are adjusting to the COVID-19 shock.
International Monetary Fund. African Dept.

, and tax control moratorium were swift . These measures were operational in April. The largest share of revenue measures consisted of tax and social security contribution deferrals, of which a large share has been subsequently collected by the end of the year, so that their net fiscal cost over 2020 was only about 0.1 percent of GDP. Implementation of spending measures of the economic response plan took more time . To swiftly address the crisis, the authorities enacted emergency procedures and temporary regulations creating four extra-budgetary funds which started

International Monetary Fund. African Dept.
Côte d’Ivoire has shown strong resilience to the pandemic, owing to the authorities’ swift policy reaction and to a decade of sound macroeconomic policies, as well as the support of the international community including the IMF.