The world economy will lose $12.5 trillion in output by 2024 due to the pandemic, according to International Monetary Fund (IMF) managing director Kristalina Georgieva, who recently said IMF will update this number revising it upwards because of omicron. Inflation is not a universal phenomenon, but a problem in a number of countries, especially the United States, she noted.

US consumer prices surged by 7 per cent in the 12 months to December 2021, the largest annual rise in nearly four decades.

The Federal Reserve and others have signaled that rate hikes may be imminent in 2022. The "spillover impact on emerging markets .... can add fuel to the fire of divergence," Georgieva said. Rate hikes in advanced economies raise the cost of borrowing and siphon away investments from emerging markets.

The IMF is urging countries to keep building up their defenses against the current pandemic and future ones, she said. It is ‘hugely important’ to ensure more diversified production of vaccines and reduce the reliance of Africa and other regions on imports, she was quoted as saying by global newswires.

She said she expects increasing demand for IMF financing this year. The IMF's executive board is slated to discuss on Friday a new Resilience and Sustainability Trust lending instrument backed by the Group of 20 countries in October.

Fibre2Fashion News Desk (DS)

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