“Driven” economic recovery, rapid rise in inflation in many countries (IMF)
Kristalina Georgieva. Photo: IMF
Noting that the global economic recovery remains “hampered” due to the novel coronavirus pandemic, IMF Managing Director Kristalina Georgieva said that “this divergence in economic fortunes is becoming more and more persistent”, and it is now expects growth to moderate slightly this year.
She noted that headline inflation rates have risen rapidly in a number of countries, again some more affected than others.
The International Monetary Fund (IMF) recently said that while the United States and China remain key growth engines even as their momentum is currently slowing and a few advanced and emerging economies continue to gain ground, growth in many other countries continue to deteriorate, hampered by poor access to vaccines and limited policy response.
“While we expect price pressures to ease in most countries in 20n22, in some emerging and developing economies, price pressures are expected to persist,” she said.
“We are facing a global recovery which remains ‘hampered’ by the pandemic and its impact. We cannot move forward properly – it is like walking with stones in our shoes! The most immediate obstacle is the ” Great Vaccination Divide ‘- also many countries with too little access to vaccines, leaving too many people unprotected against COVID, ”Georgieva said.
“At the same time, countries remain deeply divided in their ability to respond, in their ability to sustain the recovery and in their ability to invest for the future. But we can ensure a stronger recovery everywhere and shape a better post-pandemic world. for everyone. We can only do this by working together to overcome these divisions, ”she said in her speech ahead of the annual IMF and World Bank meetings.
“But the risks and obstacles to a balanced global recovery have become even more pronounced: the stones in our shoes have become more painful,” Georgieva said.
“Economic output in advanced economies is expected to return to pre-pandemic trends by 2022. But most emerging and developing countries will still take many years to recover. This delayed recovery will make it even more difficult to avoid Long-term economic scars, including job losses, which have particularly affected young people, women and informal workers, ”she said.
The IMF estimates that global public debt has increased to almost 100 percent of GDP. “This largely reflects the necessary fiscal response to the crisis as well as the heavy production and income losses due to the pandemic. Here we see yet another deep divide, with some countries more affected than others – in particular in the developing world ”, mentioned.
“Many started the pandemic with very little fiscal firepower. Now they have even less room in their budgets – and very limited ability to issue new debt on favorable terms. In short, they face financial challenges. hard times and are caught on the wrong side of the fiscal financing divide, ”said the Bulgarian economist, who has held several key positions at the World Bank.
Georgieva has called for a sharp increase in deliveries of COVID-19 vaccine doses to the developing world and that richer countries must honor their pledges immediately.
“And, together, we need to build capacity for vaccine production and distribution and remove trade restrictions on medical equipment. In addition to vaccines, we also need to close a $ 20 billion gap in funding for grants for medical professionals. testing, tracing and therapy, ”she said. noted.
“If we don’t do this, large parts of the world will not be vaccinated and the human tragedy will continue. This would delay the (economic) recovery. We could see global GDP losses reach $ 5.3 trillion over the next five years, ”she added.
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