Geoffrey Okamoto, first deputy managing director of the International Monetary Fund (IMF), on Tuesday called on countries to shift from rescuing economic collapse to resuming growth-oriented policy reforms to improve the prospects for economic recovery and make it more sustainable.

In a blog post on the IMF website, Okamoto said that the COVID-19 epidemic delayed and reversed some growth-friendly reforms, and that resuming these reforms would help make up for the output lost during the epidemic.

Mr Okamoto said allowing faster restructuring and addressing reforms of unviable businesses and labour policies to help retrain workers and align them with job openings could help shift workers and capital to more promising and dynamic sectors of the economy. An improved competition policy framework can reduce the concentration of market forces among a small number of enterprises and create more dynamic competition and innovation.

"taking advantage of this moment to make some difficult reforms means that the monetary and fiscal stimulus measures that are still in place will be a springboard to a brighter and more sustainable future, rather than a crutch to support economic weakness before the epidemic," Okamoto said. "seizing the opportunity can achieve solid growth and higher living standards for many years after the epidemic."

The IMF's call for a renewed focus on reform comes as it shifts from unconditional emergency epidemic financing to negotiations on more traditional loan schemes, which requires recipient countries to meet policy reform benchmarks.

IMF estimates that comprehensive pro-growth reforms in product, labour and financial markets could increase per capita GDP growth in emerging and developing economies by more than 1 percentage point over the next decade.

Okamoto said that developing economies that have taken such measures can double the rate of convergence of living standards with developed economies compared with those before the outbreak. For advanced economies, supply-side pro-growth reforms can guard against the risk of persistent inflation caused by the pressure of excess demand.