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In 2020 – in the course of the first yr of the Covid 19 pandemic– financial exercise contracted in additional than 90 p.c of nations, surpassing the Nice Melancholy and each World Wars. The world economic system shrank by roughly three p.c, and world poverty elevated for the primary time in a era. Just lately a World Financial institution group had the chance to current the “World Growth Report 2022 “Finance for an Equitable Restoration” within the Kyrgyz Republic and talk about key implications with policymakers, monetary regulatory and supervisory authorities, and lecturers on the Bishkek Financial Discussion board, on the Nationwide Financial institution of Kyrgyz Republic, and the American College of Central Asia.
Governments and regulators worldwide applied a swift and impressive financial coverage response that included all kinds of fiscal, financial, and monetary sector insurance policies geared toward limiting the worst speedy financial impacts of the disaster. The Authorities of Kyrgyz Republic was no exception. to households and companies going through dramatic revenue losses as a result of disaster.
Nonetheless, now – greater than two years after the onset of the pandemic – policymakers all over the world should steadiness offering continued help to households and companies confronting new challenges, akin to the worldwide rise in inflation and the warfare in Ukraine, whereas steadily scaling again help applications to restrict longer-term dangers to the restoration, akin to over-indebtedness and threats to monetary stability.
The World Growth Report 2022 recommends 4 precedence coverage areas that governments and regulators ought to act on now to mitigate longer-term dangers to an equitable restoration.
1. Managing and lowering monetary misery
Restoring credit score market transparency and resolving monetary misery is pressing to make sure banks can proceed to lend.
Whereas monetary regulators in Europe and Central Asia began withdrawing regulatory forbearance measures in 2021, the Kyrgyz Republic was one of many final within the area to take action. The particular forbearance measures have been eliminated in September this yr, whereas the remaining non permanent measures will probably be withdrawn by the top of the calendar yr. Though Financial institution supervisors have to be ready to take motion, together with enhanced measures for banks coping with asset high quality deterioration.
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