IMF chief expects global economic growth to 'moderate slightly' amid rising risks

The International Monetary Fund (IMF) expects global economic growth to “moderate slightly” this year as the risks to a balanced global recovery have become “even more pronounced”. In a virtual speech before the annual meetings of the IMF and World Bank scheduled next week, IMF Managing Director Kristalina Georgieva on Tuesday, 5 October, said that the world faces a global recovery that remains “hobbled” by the pandemic and its impact. Georgieva added that the “most immediate obstacle” is the ‘Great Vaccination Divide’ as too many nations are with too little access to vaccines. 

Georgieva said that countries remain “deeply divided” in their ability to support the recovery and invest for the future. She noted that the US and China remain vital engines of global growth, and added that in many other countries, growth continues to worsen, hampered by low access to vaccines and constrained policy response. She said that economic output in advanced economies is projected to return to pre-pandemic trends by 2021. 

“But most emerging and developing countries will take many more years to recover,” the IMF chief added. 

IMF urges countries to accelerate vaccination 

Georgieva noted that headline inflation rates have increased rapidly in a number of nations and price pressures are now expected to persist in some emerging and developing economies. She said that one particular concern with inflation is the rise of global food prices, which is up by more than 30 per cent over the past year. She added that together with the rises in energy prices, this is putting further pressure on poorer families. 

The IMF chief urged nations to accelerate vaccination to reach the targets. She also urged international institutions to vaccinate at least 40 per cent of people in every nation by the end of this year and 70 per cent by the first half of 2022. Georgieva said that if this is not done then large parts of the world will remain unvaccinated and the “human tragedy” will continue. She also added that if the recovery is held back, then global gross domestic product (GDP) losses could rise to $5.3 trillion over the next five years. 

(Image: AP)