The International Monetary Fund is urging governments to focus on equity investments rather than lending to companies.
This was stated by IMF chief economist Gita Gopinat, reports Reuters.
According to her, given the scale of the shock, more and more companies will become insolvent as their revenues fall for many months.
"Since there is an important issue of insolvency, government support should shift to investing in stocks, not increasing debts. Otherwise, we will get a large number of companies emerging from the crisis with huge debts," said Gopinat.
The IMF said the global economic recovery would be "extremely uneven and highly uncertain" and called on countries to continue to take aggressive fiscal and monetary stimulus measures to support their economies.
According to Gopinat, food prices have accelerated in some countries, but overall consumer inflation is likely to remain low in most parts of the world, as job losses will dampen wage growth.
"We are more concerned that inflation will be too low, not too high," she said.
We will remind:
The International Monetary Fund has updated its forecast for the global economy to decline in 2020 to 4.9% from 3%, and in the first half of the year the coronavirus pandemic had a more negative impact on economic activity than previously forecast.
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