IMF Managing Director: "Global Economic Growth Rate Downgraded to 5% Range This Year... $5.3 Trillion Loss Due to Vaccine Gap"

Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF)
[Photo by EPA Yonhap News]

[Asia Economy Reporter Park Byung-hee] Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), said on the 5th (local time) that the IMF's forecast for global economic growth this year, to be released next week, will be slightly revised downward. Considering that the IMF's forecast presented in July was 6%, this means that the global economic growth rate this year is expected to be in the 5% range.

Managing Director Georgieva pointed out that debt, inflation, and the vaccination rate gap between advanced and developing countries are obstacles to the global economic recovery. She especially emphasized that the vaccination gap is the biggest obstacle to economic recovery, warning that if the vaccine gap between advanced countries and low-income countries is not reduced, there will be a loss of $5.3 trillion in global GDP over the next five years.

She said, "The global economic recovery is still delayed due to the impact of COVID-19 and is not moving straight forward," likening the situation to "walking with shoes filled with stones."

Georgieva said that while the GDP of advanced countries is expected to recover to pre-COVID-19 levels by 2022, it will take several more years for most emerging and developing countries to recover their GDP.

Regarding inflation, Managing Director Georgieva predicted that inflationary pressures will ease in many countries next year. However, she foresaw that inflation will still affect emerging and developing countries. She added that central banks can avoid tightening for now, but they must be prepared to respond quickly if inflation rises faster than expected and threatens the economic recovery.

Since COVID-19, as governments around the world increased fiscal spending, the global debt level has risen to about 100% of global GDP. Georgieva explained that this means many developing countries cannot issue new sovereign bonds under favorable conditions. She also predicted that the increase in European debt would not lead to a repeat of the debt crisis that occurred in Europe after the 2008 global financial crisis.

Managing Director Georgieva emphasized that advanced countries must increase vaccine distribution to developing countries to close the vaccination rate gap. According to Our World in Data from Oxford University, 46% of the world's population has received at least one vaccine dose so far, but in low-income countries, this rate is only 2.3%.

Georgieva also stressed the need to increase investment in the green energy sector to address climate change. She estimated that the transition to green energy and low-carbon vehicles will increase global GDP by about 2% and create 30 million new jobs by 2030.

This content was produced with the assistance of AI translation services.