July 27 (UPI) — The gap between rich and poor countries’ recovery from the pandemic has widened, the International Monetary Fund warned Tuesday.
“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% in 2022, unchanged from an April estimate, the latest forecast shows, but the composition of the recovery has changed.
The recovery from the COVID-19 pandemic for advanced economies with a higher level of per capita income has been revised up, and the recovery for developing and emerging market economies, with a 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.
Close to 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, Gopinath said.
As of the end of June, about 3 billion doses of COVID-19 vaccine have been administered worldwide, and nearly 75% of those have been in advanced economies and China, the report noted. In low-income countries, less than 1% of the population has received one dose. The low-income countries primarily rely on COVAX and African Vaccine Acquisition Trust, which have delivered less than 100 million doses to about 90 countries.
The IMF said in the report that the immediate priority is global deployment of vaccines equitably.
A $50 billion IMF staff proposal, jointly endorsed by the World Health Organization, World Trade Organization and World Bank, includes a goal of vaccinating at least 40% of people worldwide by the end of 2021 and 60% by mid-2022, along with diagnostics and therapeutics.
The IMF also stressed the need for international liquidity to combat the crisis, proposing to allocate $650 billion of its reserve currency to help countries fund their spending needs.