Figure O.5 Fiscal, monetary, and financial sector policy responses to the pandemic, by country income group Tax breaks for firms
Fiscal
Tax breaks for individuals Direct cash transfers to individuals Income support for businesses
Monetary
Asset purchases Central bank liquidity Change in policy rate
Financial sector
Debt moratoria for households Debt moratoria for microfinance borrowers Debt moratoria for firms Regulatory forbearance
0
5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100
Share of countries adopting policy (%) High-income
Upper-middle-income
Lower-middle-income
Low-income
Sources: Fiscal measures: Lacey, Massad, and Utz 2021; monetary measures: World Bank, COVID-19 Finance Sector Related Policy Responses, September 30, 2021, https://datacatalog.worldbank.org/dataset/covid-19-finance-sector-related-policy -responses; financial sector: World Bank, COVID-19 Crisis Response Survey, 2021, http://bit.do/WDR2022-Covid-19_survey. Note: The figure shows the percentage of countries in which each of the listed policies was implemented in response to the pandemic. Data for the financial sector measures are as of June 30, 2021.
Resolving financial risks: A prerequisite for an equitable recovery The impact of the COVID-19 economic crisis has created unprecedented financial risks that will force governments, regulators, and financial institutions to pursue short-term stabilization policies and longer-term structural policies to steer their economies toward a sustained and equitable recovery. Traveling this path will require timely action in four policy areas: 1. 2. 3. 4.
Managing and reducing loan distress Improving the legal insolvency framework Ensuring continued access to finance Managing increased levels of sovereign debt.
8 | WORLD DE VELOPMENT REPORT 2022
