Few countries were able to generate a “hot” economy. Output gaps eventually closed, but this was largely due to downward revisions of potential output (Chart 1). [3] Major economies did not recover their pre-crisis growth trend, and only after a long expansion did the supply constraints of the economy start to be tested.
In recognition of the critical role of the International Development Association (IDA) to address growing financing needs in IDA countries, we welcome the decision to advance IDA20 by one year. It will be an opportunity to strengthen IDA’s financial capacity and to better support its clients, in particular African and fragile countries.