Global economic growth is expected to inch up to 6 percent as the world recovery from the pandemic continues, but in two tracks, according to managing director of the International Monetary Fund (IMF) Kristalina Georgieva.
Georgieva made her statements during her participation in the conclusion meeting of the G20 Finance Ministers and Central Bank Governors held on Saturday night.
“In major advanced economies and some emerging market countries, growth is accelerating– propelled by a combination of strong fiscal and monetary policy support, and rapid vaccinations; but in many other countries—particularly the poorest without access to vaccines and with surging infection rates—growth is suppressed,” Georgieva explained.
Georgieva stressed that COVID-19 still the key risk the world is facing, particularly with the dangerous wave of a highly transmissible variant that making its way across the globe at the present.
Contending with such risk, Georgieva said that countries across the globe need to accelerate vaccinations to cover at least 40 percent of the population in every country by the end of 2021, and 60 percent by the middle of 2022.
“The World Bank, WHO, WTO and IMF, in close collaboration with ACT-A, has formed a task force—a ‘war room’— to help achieve this goal and I very much welcome the G20 support to prioritize acceleration of the delivery of vaccines, diagnostics and therapeutics. By providing faster access to vaccines to high-risk populations, more than half a million lives could be saved this year. And a normal return to activity everywhere could add $9 trillion to the global economy through 2025—the $50 billion cost of this pandemic plan pales by comparison,” she illustrated.
Georgieva also noted that countries should implement sound macroeconomic policies, which proofed their pivotal role in securing the recovery.
In this respect, Georgieva clarified that the fiscal policies should provide well-designed support, tailored to country circumstances, to protect the most vulnerable and minimize the sever implications caused by the crisis.
She added that such policies should pave the way for a stronger, more sustainable, and more inclusive growth as economies exit the crisis.
On monetary policy, Georgieva said that it should remain accommodative, as inflationary pressures are likely to be temporary.
She urged central banks to be ready for a hike in inflation that is expected to be more permanent in order to avoid adverse spillovers.
In this regard, IMF’s executive board has recently approved new SDR allocation worth $650 billion to counter the harsh impacts of the crisis and boost the recovery process.