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IMF Chief Economist warns that variants can hinder the recovery of the global economy

The International Monetary Fund is aware of the “downside risk” to the projected recovery of the global economy this year and next, and is concerned that new coronavirus variants may hinder recovery. The Chief Economist said.

The International Monetary Fund is aware of the “downside risk” to the projected recovery of the global economy this year and next, and is concerned that new coronavirus variants may hinder recovery. The Chief Economist said.

“Most of the overall risks are on the downside,” Gita Gopinato said at a meeting of the International Financial Forum in Guangzhou on Saturday. Gopinus, who will become the IMF’s second bureaucrat in January, said Omicron shares could increase risk to the outlook and the world could see more aggressive variants that further impair recovery. ..

Washington-based lenders adjusted their outlook for global economic expansion this year to 5.9% in October, warning of a “dangerous difference” between rich and poor vaccine-free countries. Did.

Gopinath to help increase vaccination rates in Africa, where many countries are less than 40% of the vaccinated population, by fulfilling their commitment to donate to Covax’s global vaccine distribution program. I urged each country. She also called for steps to be taken to make an additional 400 million doses available through swaps. She also urged countries to remove trade barriers to the import and export of vaccines.

Inflation alert

She said the world’s central banks need to remain “extremely vigilant” about inflationary pressures and maintain policy independence to fix expectations.

Significant uncertainty about the accelerating inflation in the United States and the turmoil in supply and demand in the coming months could lead to a “scenario of further inflation,” in many emerging economies, especially foreign currency borrowing.

“It is especially important for major central banks to communicate their policies in advance and explain their actions so that you do not cause market turmoil,” Gopinas said. “Monetary policy must take into account country-specific conditions in responding to it.”

According to Gopinath, each country has different underlying or core inflation, which requires countries to adjust their monetary and fiscal policies based on their own circumstances.

Inflation of commodities exceeds inflation of services in most countries, Gopinus said. This is unusual and reflects the fact that demand has shifted from services to commodities beyond the pandemic.

-With the support of Jason Clenfield and Krystal Chia.

IMF Chief Economist warns that variants can hinder the recovery of the global economy

Source link IMF Chief Economist warns that variants can hinder the recovery of the global economy

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