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Washington: Noting that the global economic recovery remains “hobbled” due to the COVID-19 pandemic, the International Monetary Fund (IMF) said on Tuesday that the US and China remain important engines of growth, albeit at a slower pace.
Ahead of releasing the updated World Economic Outlook (WEO) next week, IMF Managing Director Kristalina Georgieva said she now expects a marginal slowdown in growth this year. The IMF’s report on financial developments and policies in WEO member countries.
“We are facing a global recovery that continues to be “troubled” by the pandemic and its impact. We are not able to move properly – it is like walking with stones in our shoes! The most immediate thing,” said Georgieva. The barrier is the ‘Great Vaccination Divide’ – many countries have little access to vaccines, leaving many people vulnerable.
“At the same time, countries remain deeply divided in their ability to respond – in being able to support the recovery, and in their ability to invest for the future. But we can secure a strong recovery everywhere and all. We can only do this by working together to bridge these divides,” she said in her address ahead of the annual meeting of the IMF and World Bank next week.
This will be addressed at the annual meeting in Washington next week, he noted in a veiled speech at Bocconi University and the T20 Nationals (think20 summit).
“But the risks and obstacles to a balanced global recovery have become even more apparent: The stones in our shoes have become more painful,” Georgieva said.
“The United States and China remain important engines of growth, even as their pace is slowing now. He noted that some advanced and emerging economies are still gaining momentum, including Italy and Europe more broadly.
In contrast, growth continues to deteriorate in many other countries, hindered by low access to vaccines and limited policy response, particularly in some low-income countries. The IMF chief explained that this divergence in economic fortunes is becoming more frequent.
“Economic output in advanced economies is projected to return to pre-pandemic trends by 2022. But it will take many more years for most emerging and developing countries to recover. This delayed recovery will make it even more difficult to survive a long-term economic crisis, including job losses, which young people, women and informal workers find especially difficult,” she said.
She noted that headline inflation has risen sharply in many countries, again with some more affected than other countries.
“While we expect price pressures to ease in most countries in 2022, price pressures are expected to remain in some emerging and developing economies,” she said.
The IMF estimates that the global public debt has risen to nearly 100 percent of GDP. “Most of this reflects the huge production and revenue loss due to the pandemic, along with the necessary financial response to the crisis. Here we see a more profound divide, with some countries affected more than others – particularly in the developing world,” she said.
“Many started the pandemic with very little fiscal firepower. They now have even less space in their budgets – and very limited ability to issue new loans on favorable terms. In short, they face tough times and are caught on the wrong side of the financial financing divide, said the Bulgarian economist, who has held several key positions at the World Bank.
Georgieva called for rapid distribution of COVID-19 vaccine doses to developing countries and that the wealthy nation should immediately fulfill its donation promises.
“And, together, we must boost vaccine production and distribution capabilities; and remove trade restrictions on medical supplies. In addition to vaccines, we should also close the USD-20 billion gap in grant funding for testing, tracing and therapeutics, he said.
“If we do not do this, large parts of the world will not be vaccinated, and the humanitarian tragedy will continue. This will set back the (economic) recovery. We will see the global GDP deficit increase to US$5.3 trillion over the next five years,” he said. can reach.
The coronavirus has killed more than 48 lakh people, with 235 million confirmed infections worldwide so far, according to Johns Hopkins University.
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