The failure to deliver enough vaccines to low-income countries will reverberate throughout the global economy and could cost up to $5.3 trillion in economic losses over five years, International Monetary Fund Managing Director Kristalina Georgieva said Tuesday.
COVID-19 vaccine inequality widens gap in global recovery, IMF says
IMF is warning about a sharp divergence in the economic recovery between wealthier countries and the rest of the world due to COVID-19 vaccine inequality and uneven fiscal firepower.
Georgieva, speaking ahead of IMF’s annual meetings next week, said that in addition to the “great vaccine divide,” the strong divergence in the economic recovery between rich and poor nations was a major concern.
“Economic output in advanced economies is projected to return to pre-pandemic trends by 2022. But most emerging and developing countries will take many more years to recover,” she said.
What drama? The IMF chief was speaking at an Italian university, but the carefully moderated event meant she was never asked about the investigations into her alleged misconduct during her time at the World Bank — and she did not proactively address the elephant in the room.
What the warning means: Georgieva said poorer nations were at greater risk of inflation. Food prices, she noted, are up more than 30% over the past year. And governments in many emerging markets and developing economies are in weaker positions because of the COVID-19 pandemic, with rising debts and less fiscal power to support their economies.
Tightening to come: She cautioned lower-income countries that it is “time to scrutinize your debt.” There may be a tightening of policy in advanced economies in the coming months which would have repercussions on the world’s poor.
More ahead: Georgieva continued to press wealthy nations to channel their recently received Special Drawing Rights to help provide zero interest loans to low-income countries. She also urged action on climate change, calling for carbon pricing, and saying green development could raise global gross domestic product by 2% this decade and create 30 million new jobs.
About the author
Shabtai Gold
Shabtai Gold is a Senior Reporter based in Washington. He covers multilateral development banks, with a focus on the World Bank, along with trends in development finance. Prior to Devex, he worked for the German Press Agency, dpa, for more than a decade, with stints in Africa, Europe, and the Middle East, before relocating to Washington to cover politics and business.
