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IMF trims 2021 global GDP forecast, cites 'vaccine divide,' inflation

IMF trims 2021 global GDP forecast, cites 'vaccine divide,' inflation

IMF Chief Kristalina Georgieva said the global economy was bouncing back but the pandemic continued to limit the recovery, with the main obstacle posed by the “Great Vaccination Divide”

IMF Managing Director Kristalina Georgiva IMF Managing Director Kristalina Georgiva

The International Monetary Fund (IMF) expects global economic growth in 2021 to fall slightly below its July forecast of 6 per cent, IMF Chief Kristalina Georgieva said on Tuesday, citing risks associated with debt, inflation and divergent economic trends in the wake of the Covid-19 pandemic.

Georgieva said the global economy was bouncing back but the pandemic continued to limit the recovery, with the main obstacle posed by the “Great Vaccination Divide” that has left too many countries with too little access to Covid vaccines.

In a virtual speech at Bocconi University in Italy, Georgieva said next week's updated World Economic Outlook would forecast that advanced economies will return to pre-pandemic levels of economic output by 2022 but most emerging and developing countries will need "many more years" to recover.

“We face a global recovery that remains ‘hobbled’ by the pandemic and its impact. We are unable to walk forward properly — it is like walking with stones in our shoes,” she said. The US and China remained vital engines of growth, and Italy and Europe were showing increased momentum, but growth was worsening elsewhere, Georgieva said.

Inflation pressures, a key risk factor, were expected to subside in most countries in 2022 but would continue to affect some emerging and developing economies, she said.