The International Monetary Fund is estimating this month that global growth for 2021 will be about 6%, the same as forecast in April, but with some countries growing faster and others more slowly, IMF Managing Director Kristalina Georgieva said on Wednesday.
Georgieva, speaking at an online event sponsored by the Peterson Institute for International Economics, said that economic recovery will be held back unless the pace of COVID-19 vaccination picks up, adding that a goal of ending the pandemic by the end of 2022 will not be reached at the current pace.
The IMF projected in April that 2021 global growth would hit 6%, a rate unseen since the 1970s, as vaccine availability improves and economies reopen with the help of unprecedented fiscal stimulus, particularly in the United States.
But Georgieva said the relative lack of vaccine access in developing countries and the rapid spread of the COVID-19 Delta variant was threatening to slow the recovery's momentum.
The IMF is scheduled to release its next World Economic Outlook forecast update on July 27, but Georgieva said the IMF's projected global growth rate for this year would remain at 6%.
Frequently Asked Questions
A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.
There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.
Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.
"It is 6% in July, but between April and July, the composition of this 6% has changed," Georgieva said in the PIIE session with former European Union trade commissioner Cecilia Malmstrom.
"Some countries are now projected to grow faster, some countries are now projected to grow slower. What is the difference? It is primarily the speed and effectiveness of vaccinations and availability of fiscal space to act," Georgieva added.
She said an IMF-World Bank goal for countries to provide $50 billion to step up COVID vaccination rates will likely require more than the 11 billion doses initially envisioned, because booster shots may now be necessary, and to cover vaccine losses in some developing countries that lack sufficient cold storage facilities.