Ignazio Visco: Statement - meeting of the Development Committee

Statement by Mr Ignazio Visco, Governor of the Bank of Italy and Governor of the Constituency of Albania, Greece, Italy, Malta, Portugal, San Marino and Timor-Leste, at the 104th Meeting of the Development Committee (Joint Ministerial Committee of the Boards of Governors of the Bank and the Fund on the Transfer of Real Resources to Developing Countries), Washington DC, 15 October 2021.

The views expressed in this speech are those of the speaker and not the view of the BIS.

The global economy is recovering from the Covid-19 pandemic, thanks largely to progress in vaccination campaigns and continuing policy support. Last year's coordinated monetary, fiscal and macroprudential response has set the stage for recovery: according to the IMF, the global economic contraction recorded in 2020 would have been three times worse without such swift and worldwide policy support.

However, downside risks are still substantial due to the possible spread of new and more dangerous variants, and recovery remains highly uneven across the world's regions. Because of slow progress in vaccinations and reduced fiscal space, prospects are less favourable in many emerging and developing economies. According to the World Bank, the pandemic has pushed about 100 million people into extreme poverty, thus reversing earlier gains, and exacerbated food insecurity for millions of people.

The world is facing multiple global and interconnected challenges: protecting public health, eradicating extreme poverty, ensuring environmental sustainability, maintaining trade openness and financial stability, addressing humanitarian crises, and fostering peace building. Successfully addressing any of these requires addressing the others. Many of them share the characteristics of the global public good: their provision is endangered if national interests and market outcomes are not mediated by a truly multi-dimensional, multilateral and far-sighted approach.