The International Monetary Fund has told rich countries to follow through on their vaccination and climate change promises to developing nations, as it warned of a dangerous divergence in economic prospects around the world.
The IMF downgraded its growth forecasts for many Western countries, including the UK, but said its real concern was low-income countries where the outlook had noticeably worsened.
The Washington-based organization’s semi-annual World Economic Outlook (WEO) release showed the recovery from last year’s collapse in activity continuing, but momentum had weakened.
The release of the WEO report came at the beginning of the IMF’s annual meeting, with the agenda dominated by concerns about risks to global growth and the cloud looming over the fund’s managing director, Kristalina Georgieva.
The IMF’s executive board said there was no conclusive information to support allegations that Georgieva acted inappropriately when she was vice president of the World Bank in 2018 and reaffirmed “Your full confidence” in your leadership.
Gita Gopinath, IMF economic adviser, said the global growth projection for 2021 had been marginally revised down from 6% in July at 5.9% and remained unchanged for 2022 at 4.9%. The UK is expected to be the fastest growing of the G7 group of leading industrial nations, although the IMF estimate was lowered from 7% to 6.8%. The United States, Germany, Japan and Canada also lowered their growth estimates.
Gopinath said the impact of the pandemic had been much harsher in low-income countries, which were also at higher risk of being affected by climate change.
“The dangerous divergence in the economic outlook between countries remains a major concern,” Gopinath said in a blog accompanying the WEO. “Aggregate production of the group of advanced economies is expected to recover its pre-pandemic trend path in 2022 and exceed it by 0.9% in 2024.
“By contrast, aggregate production for the emerging market and developing economies group (excluding China) is expected to remain 5.5% below the pre-pandemic forecast in 2024, resulting in a further setback for the improvements in their living standards. “
Gopinath said these divergences were a consequence of the “large vaccine gap” and large disparities in policy support. While more than 60% of the population in advanced economies was fully vaccinated and some were now receiving booster injections, approximately 96% of the population in low-income countries remained unvaccinated.
“Therefore, the top political priority is to vaccinate at least 40% of the population of all countries by the end of 2021 and 70% by mid-2022. This will require high-income countries to meet existing donation commitments. of vaccine doses, coordinate with manufacturers to prioritize deliveries to Covax. [the global initiative to make access to vaccines more equitable] in the short term and eliminate trade restrictions on the flow of vaccines and their supplies. “
Looking ahead to next month’s UN climate change conference in Glasgow, Gopinath said another urgent priority was the need to curb rising global temperatures and contain the growing adverse effects of the climate crisis. This required more ambitious commitments to reduce greenhouse gas emissions.
“A policy strategy that includes an international minimum carbon price adjusted to the country’s circumstances, green public investment and a boost in research subsidies, and selective and compensatory transfers to households can help advance the energy transition of equitable manner. Just as important, advanced countries must deliver on their previous pledges to mobilize $ 100 billion. [£73bn] of annual climate finance for developing countries.
The IMF cited the UK as an example of the effectiveness of large-scale vaccination campaigns.
Although the number of confirmed daily Covid-19 cases in the UK in July 2021 was higher than in December 2020 for most of the month, hospitalization and death rates were only 10% to 20% of levels. recorded last winter.
“The key difference between the two points in time is that the UK had fully vaccinated about half of its population (two-thirds at least partially vaccinated) by July 2021, while in 2020 there was no vaccine protection available.” said the IMF.
George is Digismak’s reported cum editor with 13 years of experience in Journalism