Central banks need to play a more active role in Covid-19 economic recovery

10 June

Central banks of various economies have injected new money into financial markets to deal with the economic downturn caused by the Covid-19 pandemic.

These actions although useful may not be enough to post a strong recovery.

Investment-led growth policies and long-term investments are essential to reverse some of the damage caused by the pandemic.

Stephany Griffith-Jones, an economist, shared an article on how central banks need to take more action to support economies after the Covid-19 pandemic.

G7 nations injected approximately $2.5tn into financial markets in March and April using quantitative easing and liquidity programmes to prevent a collapse in the financial sector.

The article notes that banks need to play a bigger role by lending to sectors that are productive and create more jobs.

These jobs also need to be sustainable to create green infrastructure that enables transition towards a zero carbon economy.

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