IMF lowers global growth projection for 2021 to 5.9%

The dangerous divergence in economic prospects across countries remains a major concern, said Gita Gopinath, IMF economic counsellor and director of its research department. These are a result of the ‘great vaccine divide’ and large disparities in policy support, IMF said in a press release.

Gopinath said risks to economic prospects have increased and policy trade-offs have become more complex in the ongoing COVID-19 pandemic. Monetary policy will need to walk a fine line between tackling inflation and financial risks and supporting the economic recovery.

“One of the major risks remains that there could be new variants of the virus that could further slow back the recovery. We're seeing major supply disruptions around the world that are also feeding inflationary pressures, which are quite high and financial risk taking also is increasing, which poses an additional risk to the outlook,” explained Gopinath.

“The foremost priority is to vaccinate the world. Much greater multilateral action is needed to vaccinate at least 40 per cent of the population in every country by the end of this year and 70 per cent by the middle of next year,” added Gopinath.

Fibre2Fashion News Desk (DS)