The IMF sees 2021 global GDP slightly below previous forecasts of 6%

Washington — The International Monetary Fund expects global economic growth in 2021 to be just below the July forecast of 6%, IMF Prime Minister Cristalina Georgieva said Tuesday after debt, inflation and COVID. He listed the risks associated with various economic trends. 19 pandemic.

Georgieva said the global economy is recovering, but pandemics continue to limit recovery, with too few countries having too little access to the COVID-19 vaccine being the main obstacle to the “major vaccination split.” He said he was.

In a virtual speech at the University of Bocconi in Italy, Georgieva predicts that next week’s updated global economic outlook will return developed economies to pre-pandemic economic output by 2022, but most emerging economies. Said developing countries will need “more years” to recover. ..

“We are facing a global recovery that remains” hampered “by the pandemic and its consequences. We can’t move forward properly. It’s like walking with stones in our shoes, “she said.

According to Georgieva, the United States and China remain important drivers of growth, with Italy and Europe gaining momentum, while growth is declining elsewhere.

Inflationary pressure, a key risk factor, was expected to subside in most countries in 2022, but will continue to affect some emerging and developing economies, she said, sustaining inflation expectations. He warned that rising interest rates could lead to sharp rises in interest rates and tightening of monetary policy. conditions.

Central banks can avoid tightening for now, but she says she needs to be prepared to act swiftly if recovery strengthens faster than expected or if the risk of rising inflation becomes apparent. Stated.

She also said it was important to monitor financial risks, including expanded asset valuations.

According to Georgieva, global debt levels are currently about 100% of the world’s gross domestic product, and many developing countries have very limited ability to issue new debt on favorable terms. Means

Georgieva said it was important to successfully complete the debt restructuring efforts already undertaken by Zambia, Chad and Ethiopia and encourage others to seek help.

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Signboard for the International Monetary Fund (IMF) building held in Washington on April 5, 2016. (KarenBleier / AFP / Getty Images)

In response to questions from participants, she said, increased debt transparency, sound debt management practices, and expanded regulatory frameworks will help ensure increased private sector participation.

Georgieva was asked about rising debt levels in Europe and gained economic momentum to avoid another sovereign debt crisis that Greece faced in the aftermath of the 2007-2008 global financial crisis. Said Europe was laid on a healthy foundation.

However, she said countries need to carefully plan how they will transition to medium-term fiscal consolidation in order to eliminate the increased debt burden associated with pandemics.

“The bill will come to a deadline,” she said, adding that proper planning is needed to reduce long-term debt burden while avoiding “brutal” cuts in education and medical funding.

Accelerate vaccine delivery

Georgieva will increase the supply of COVID-19 vaccines to developing countries, remove trade restrictions, and fill the $ 20 billion gap in grants needed to test, track and treat COVID-19 to rich countries I urged you.

Failure to close the large vaccination gap between developed and poor countries could hinder global recovery and result in a cumulative global GDP loss of $ 5.3 trillion over the next five years. She said there was.

Andrea Charal