October 06, 2021 19:43 PM
International Monetary Fund (IMF) President Georgieva said on Tuesday that the IMF predicts that global economic growth in 2021 will drop to slightly less than 6%, which is the level predicted by the organization in July. She claimed that debt-related risks, Inflation and the different economic trends after the epidemic are the main reasons.
Georgieva said that although the global economy is rebounding, the epidemic continues to inhibit recovery. The gap in vaccination between countries is the main obstacle, and too many countries cannot obtain the new crown vaccine.
Georgieva said in an online speech at Bocconi University in Italy that the latest global economic outlook released next week will predict that the economic output of advanced economies will return to their pre-epidemic levels by 2022, but most emerging economies It will take “more years” for the body and developing countries to recover.
“The global economic recovery is still’constrained’ by the epidemic and its effects. We can’t move forward normally – like walking with stones in our shoes,” she said.
Georgieva said that the United States and China are still important engines of economic growth. The growth momentum of Italy and Europe has strengthened, but the growth of other regions is deteriorating.
She said that inflationary pressures, which are expected to be a key risk factor in 2022, will subside in most countries, but will continue to affect some emerging and developing economies. She warned that the continued rise in inflation expectations could lead to rapid rises in interest rates and tightening of financial conditions.
She said that although central banks may avoid tightening policies for the time being, they should be prepared to act quickly if the economy recovers faster than expected or the risk of rising inflation becomes a reality.
She pointed out that it is also important to monitor financial risks, including excessive asset valuations.
Georgieva said that the current global debt level is about 100% of the global gross domestic product (GDP), which means that many developing countries have very limited ability to issue new debt under favorable conditions.
She urged rich countries to increase the provision of new crown vaccines to developing countries, remove trade restrictions, and fill the $20 billion funding gap required for new crown testing, tracking and treatment.
She said that if the huge gap in vaccination rates between developed economies and poor countries is not eliminated, it may hinder global recovery and bring the cumulative loss of global GDP in the next five years to 5.3 trillion US dollars.
Georgieva said that countries should also speed up efforts to address climate change, ensure technological change and promote tolerance-all of which can boost economic growth.
She said that the shift to renewable energy, new power grids, energy efficiency and low-carbon travel could increase global GDP by about 2% and create 30 million new jobs in the next ten years.