The International Monetary Fund (IMF) published its forecasts on current trends and future expectations in global financial markets. Commenting on significant outcomes of the report, Head of the Department of the Center for Analysis of Economic Reforms and Communication Ayaz Museyibov states that the core outcome of the IMF report is that at the moment, the concept of access to the vaccine can be fully associated with access to economic and financial services. Thus, IMF's economic analysis shows that the acceleration of vaccination has eliminated the risks associated with the strengthening of economic recovery and falling asset prices. Currently, the future stability of financial systems will directly depend on the scope of tackling the fight against pandemic within the healthcare frames. The provision of vaccines by states will determine how their population will use services to be created as a result of the restoration of financial and economic processes. However, along with that, the report advises taking supportive measures on global fiscal and monetary policies until the vaccine is fully accessible. At the same time, unequal access to vaccines due to political weight and financial constraints can result in additional financial stability problems, especially in developing countries. In this regard, the countries should keep in focus the risk-prone issues. Assistance from the international organizations and global economic policy designers to supplying these countries with vaccines remains vital. Otherwise, the problems in these countries, which accounted for 65 percent of global economic growth in 2017-2019, could have a devastating effect on the global value chain. As a result, new financial stability challenges may form in the countries that could get the pandemic under the control. 

One of the most positive outcomes of the report was a notice about good financing opportunities to be created for developing countries in 2021. Since the end of 2020, tourism and aviation services have already started recovering, which will have a positive impact on global financial flows. Despite uncertainties in the global economic landscape, investors are confident about economic growth in 2021, in particular, support policies in various countries on combating the pandemic will neutralize possible economic concerns shortly. Temporary long-term interest rate increases in mega-stock markets such as the United States, very low-interest rates, and rising stock prices in the coming years are among main expectations. Certainly, this will have a positive impact on global financial systems.

Concerning the economic impacts of the pandemic, the report also stresses that the global economy could overcome the fight against the pandemic crisis – the biggest challenge after the Great Depression, much better than expected. For example, although the number of companies with a negative rating (BBB rating or more negative economic expectations) has tripled globally, the default rate is much lower than the peak of previous periods. There are doubts that this is directly related to the fact that a significant part of the gross domestic product of countries is spent on measures to combat the pandemic. 

A.Museyibov notes that growing debt problems in the world are among the threats to the financial stability of countries. The analysis of the report demonstrates how the development of capital markets is important for solving debt problems and financial stability as a whole. The development of capital banks instead creates favorable opportunities for developing countries to mitigate risks emerging in financial markets. By ensuring the fight against the pandemic relying only on its internal financial resources and demonstrating one of the best results in terms of external debt, Azerbaijan could maintain its position.

IMF calculations on the banking sector show that the sector could avoid counter effects of the pandemic due to high liquidity and capital buffers and support policies pursued by central banks in the financial markets. To adequately combat such challenges as corporate debt, the fragile financial situation in non-bank credit institutions, access to financial markets, and declining profitability The IMF advises the banking sector, especially in developing countries, to form a macroprudential policy frame. Also, in the context of low-interest rates in the global banking sector, banks are pursuing credit expansion policies and profitability issues as a challenge. The support measures adopted in the banking sector in Azerbaijan prevented systematic fluctuations and risks. The volume of non-performing loans in the total loan portfolio, considered one of the most important indicators of strengthening the banking system, fell to a five-year low of 6 percent, and this indicator does not show an upward trend. Thus, Azerbaijan has joined such countries as Slovenia, Estonia, and Denmark, which historically has demonstrated the best development trends. This, in turn, creates favorable conditions for the banking sector with the most innovative lending policy implementation infrastructure, including appropriate regulatory framework and scoring models in the post-pandemic period, to run competitive expansionist credit policy based on profitable and risk-oriented management policy.

As we can see, stability in global financial systems, at least in the short and medium-term, will depend on the production, distribution, and access to the vaccine. Along with that, supportive measures on achieving financial stability play a significant role in the recovery process. The manifold measures taken by Azerbaijan in the fight against the pandemic are of great economic importance and further improve the future economic outlook in the financial and banking sector.