Vaccines split global recovery – IMF

The global economy will expand by 6% this year, but disparities between nations are widening as advanced economies accelerate and developing countries fall behind, the International Monetary Fund (IMF) said this week. 

Although the forecast for global growth is unchanged from the previous estimate in April, the United States is projected to see a faster 7% growth thanks to government spending and widespread Covid-19 vaccinations, while the IMF slashed the forecast for India, which is facing a resurgence of infections.

“Vaccine access has emerged as the principal fault line along which the global recovery splits into two blocs,” the IMF said in its updated World Economic Outlook, warning of the danger to the economy if new virus variants are allowed to take hold.

It again stressed that “the immediate priority is to deploy vaccines equitably worldwide”. Advanced nations have vaccinated nearly 40% of the population, compared to 10% in emerging markets and fewer in low-income countries.

“The emergence of highly infectious virus variants could derail the recovery and wipe out $4.5-trillion cumulatively from global GDP by 2025,” IMF chief economist Gita Gopinath warned in a blog post.

More than half of that lost wealth would come from rich nations if new variants of the coronavirus spread.

This is not just a “tail risk” that is highly unlikely, “this is a realistic downside risk”, said Petya Koeva-Brooks, deputy director of the IMF research department.

Although some emerging market nations such as Brazil and Mexico are poised to show stronger growth this year, developing nations as a group are lagging and struggling to return to their pre-pandemic levels.

The IMF is pushing for a $50-billion plan that offers a “feasible cost to end the pandemic” by distributing vaccines and addressing needs in lower-income countries. — AFP

We make it make sense

If this story helped you navigate your world, subscribe to the M&G today for just R30 for the first three months

Subscribers get access to all our best journalism, subscriber-only newsletters, events and a weekly cryptic crossword.”

Heather Scott
Guest Author
Agence France Presse
Agence France Presse works from worldwide. AFP Photo's official Twitter account. Tweeting news and features from Agence France-Presse's global photo network Agence France Presse has over 120540 followers on Twitter.

Related stories

WELCOME TO YOUR M&G

Already a subscriber? Sign in here

Advertising

Latest stories

Chile’s lithium a poisoned chalice

It provides profit to billionaires but exhausts the land and its people

World Lion Day: Five young lions rescued in Romania arrive...

The country’s captive lion population of 9 000 is three times the size of the wild lion population.

Marikana lawsuits to be finalised by end of August

The state has already paid out R170-million in claims following the August 2012 massacre

Keeping it surreal: The game in Spain is mainly insane

Just when you thought the Spanish off season couldn’t get any weirder, Lewandowski and his costly colleagues might be left in lavish limbo
Advertising

press releases

Loading latest Press Releases…
×