The IMF raised concerns that the uneven distribution of vaccines is slowing the recovery. (File)
Washington:
IMF Director Kristalina Georgieva said the new Omicron variant of Covid-19 could slow down the global economic recovery, just like the Delta strain did.
“A new variant that could spread very quickly could dampen confidence and in that sense we could see some sort of decline in our October forecast,” she said at a Reuters event. on global growth”.
In the most recent World Economic Outlook, the fund forecast global growth of 5.9% this year and 4.9% in 2022, but the United States and other major economies have suffered. correction after the spread of the Delta variant “caused some conflict,” Georgieva said.
“Even before the arrival of this new variant, we were concerned that the recovery, while it continued, was losing some momentum,” the head of the IMF said. The IMF said, noting that policymakers are now dealing with new issues such as inflation.
The IMF’s most recent forecasts have raised concerns that global supply chain problems and uneven distribution of vaccines are slowing the recovery and leaving some countries behind.
Soaring demand in many advanced economies coupled with shortages of key components such as semiconductors has fueled a bullish wave.
Less than two months ago, Georgieva expressed confidence that inflation would not become a “runaway train” but on Friday she said the US Federal Reserve would have to raise interest rates in 2022, not not in 2023 as the IMF had previously predicted.
The Fed, which cut its benchmark lending rate to zero in the early days of the pandemic, has begun pulling back on its stimulus measures and has signaled it will accelerate that process, which should put it in position to raise rates to zero by mid-year.
“We believe the path to a policy rate hike could go faster,” said Georgieva.
(Except for the title, this story has not been edited by NDTV staff and is published from an aggregated feed.)
