The International Monetary Fund warned on Tuesday that the recovery gap between rich and poor countries from the pandemic has widened.
“The global economic recovery continues but with a widening gap between advanced economies and many emerging market and developing economies,” IMF Chief Economist Gita Gopinath told reporters at a virtual press conference.
The global economy is expected to grow 6% this year and 4.9 percent in 2022, unchanged from an April estimate, according to the most recent forecast, but the composition of the recovery has shifted.
The recovery from the COVID-19 pandemic has been revised up for advanced economies with higher per capita income, while the recovery for developing and emerging market economies with lower per capita income and less vaccine access has been revised down.
“Vaccine access has emerged as the principal fault line along which the global recovery splits in two blocs: those that can look forward to further normalization of activity later this year (almost all advanced economies) and those that will still face resurgent infections and rising COVID death tolls,” the report stated. “The recovery, however, is not assured even in countries where infections are currently very low so long as the virus circulates elsewhere.”
Growth prospects for advanced economies, such as the United States, improved by 0.5% in 2022, but that was offset by a decline in growth for the developing and emerging market economies, especially for emerging Asia, the updated report showed.
According to Gopinath, nearly 40% of the population in advanced countries has been fully vaccinated, compared to 11% in emerging market economies and a tiny fraction in developing countries.
According to the report, approximately 3 billion doses of COVID-19 vaccine had been administered globally as of the end of June, with nearly 75 percent of those administered in advanced economies and China. Less than 1% of the population in low-income countries has received one dose. Low-income countries rely primarily on COVAX and the African Vaccine Acquisition Trust, which have delivered less than 100 million doses to approximately 90 countries.
The IMF stated in the report that the immediate priority is equitable global vaccine deployment.
A $50 billion IMF staff proposal, endorsed by the World Health Organization, World Trade Organization, and World Bank, includes a goal of vaccinating at least 40% of the world’s population by the end of 2021 and 60% by mid-2022, as well as diagnostics and therapeutics.
The IMF also emphasised the importance of international liquidity in combating the crisis, proposing to allocate $650 billion of its reserve currency to assist countries in meeting their spending requirements.