The global economy is recovering from the depths of the coronavirus crisis. There are signs however, of slowing momentum in countries with resurging infection rates. This was a statement from the International Monetary Fund.
The report underscored the uneven nature of the global recovery. It warned the crisis would likely leave deep, unequal scars. It was released ahead of online meetings of finance officials and leaders from the Group of 20 countries this week.
IMF Managing Director Kristalina Georgieva hailed what she called significant progress in the development of vaccines. That was to vanquish a virus that has claimed more than a million lives around the globe. Moreover, it has resulted in tens of millions of job losses.
But she warned that the economic path ahead remains difficult and prone to setbacks.
Last month, the IMF forecast a 2020 global contraction of 4.4%. The global economy expected to rebound to growth of 5.2% in 2021. However it said the outlook for many emerging markets had worsened.
She said data received since that forecast confirmed a continuing recovery. The United States and other advanced economies were reporting stronger-than-expected economic activity in Q3.
She also said, however, the most recent data for contact-intensive service industries pointed to a slowing momentum in economies. This was in reference to economies where the pandemic was resurging.
More Support is Needed
The IMF said poverty and inequality were increasing, and more support was needed. Fiscal spending of nearly $12 trillion and monetary policies had averted even worse outcomes.
A rise in new outbreaks and more stringent mobility restrictions could reduce growth, increase public debt and worsen economic impact. It will have the same effects from delays in vaccine development and distribution.
Georgieva encouraged G20 countries to act swiftly and in a united manner. This was to provide continued support and ensure enough vaccines were available around the world. Additionally, she warned that no recovery could be sustained unless the pandemic was defeated everywhere.The head of the World Health Organization (WHO) stated that G20 leaders had an opportunity to commit financially and politically.
That commitment was to the COVAX global facility. Moreover, G20 leaders had an opportunity to set up to provide COVID-19 vaccines to poorer countries.
Under outgoing President Donald Trump, the U.S. has threatened to pull out of the WHO. Trump has refused to join the COVAX facility.
Analysts say his successor, Democrat Joe Biden, could change course after he takes office on Jan. 20.
The IMF Managing Director also called on G20 leaders to commit to increased investment in green technologies and increases in carbon prices. The move could boost global gross domestic product and create about 12 million jobs over a decade.
The president-elect has also pledged to rejoin the 2015 Paris climate change agreement that Trump quit.
