WASHINGTON: The global economy will expand by six percent this year, but disparities between nations are widening as advanced economies accelerate while developing countries fall behind, the IMF said Tuesday.
While the forecast for global growth is unchanged from the previous estimate in April, the United States is projected to see faster seven percent growth thanks to massive government spending and widespread Covid-19 vaccinations, while the IMF slashed the forecast for India, which is facing a resurgence of infections, reports AFP.
The Washington-based crisis lender once again stressed that “the immediate priority is to deploy vaccines equitably worldwide.”
Advanced nations have vaccinated nearly 40 percent of the population, compared to barely 10 percent in emerging markets and even fewer in low-income countries, the report said.
“The emergence of highly infectious virus variants could derail the recovery and wipe out $4.5 trillion cumulatively from global GDP by 2025,” IMF chief economist Gita Gopinath warned in a blog post.
More than half of that lost wealth would come from rich nations in the event new variants of the coronavirus spread unchecked.
And this is not just a “tail risk” that is highly unlikely, “This is a realistic downside risk,” said Petya Koeva-Brooks, deputy director of the IMF Research Department.