IMF Trims Global Economic Forecast due to Vaccine Gap Btw. Nations

The head of the International Monetary Fund Kristalina Georgieva warned that the global economy is still "stumbling" due to the  pandemic, pointing out that the IMF had lowered its forecast for global growth this year.

Georgieva said that the most serious obstacle to a full recovery is the vaccine gap between rich and poor countries and warned that the global economy could incur a cumulative loss of $5.3 trillion over the next five years unless it is closed.

The managing director called on rich countries to immediately fulfill their pledges to share vaccine stockpiles with developing countries, ahead of the annual meeting next week.

"We are facing a global recovery that continues to be hampered by the pandemic and its impact," she said. “We are unable to walk forward properly - it is like walking with stones in our shoes"

"The most immediate obstacle is the 'large vaccination gap' - many countries have very little access to vaccines, leaving many people unprotected from COVID."

In July, the IMF forecast 6% growth for the global economy in 2021, but Georgieva said that will be trimmed in new forecasts to be published in next week's WEO.

After the supply chain hit and rising inflationary pressures, the momentum in the United States and China - the world's two largest economies - is slowing, she added.

Low-income countries have been hit by a combination of limited access to vaccines that rich countries are using to deal with the economic impact of the virus.

“We can still meet the targets set by the International Monetary Fund, the World Bank, the World Health Organization, and the World Trade Organization to vaccinate at least 40% of people in each country by the end of this year, and 70% by the first half of 2022,” the IMF managing director said.

She concluded that world leaders and international institutions must also close a $20 billion gap in grant funding for testing, tracing, and treatments. If we do not, large parts of the world will remain vulnerable, and the human tragedy will continue. This would hinder recovery. We can see global GDP losses rise to $5.3 trillion over the next five years.