Vaccination Rates Drive Global Economic Growth Prospects, IMF Says
Global lender raises forecasts for advanced economies but lowers them for emerging and developing countries
The economic outlook is diverging for countries based largely on how well they are rolling out Covid-19 vaccinations, according to new forecasts released Tuesday by the International Monetary Fund.
Economic prospects are improving for advanced economies, where nearly 40% of the population has been vaccinated, despite challenges from new variants of the coronavirus, the IMF said. At the same time, far lower vaccination rates have left emerging and developing economies more vulnerable to additional waves of the pandemic and the associated economic fallout.
Overall, the world economy is expected to expand 6% this year, the IMF said, unchanged from its April forecast and a strong rebound from last year’s 3.2% contraction. Improved forecasts for advanced economies were offset by downgrades for emerging markets and low-income countries.
“Vaccine access has emerged as the principal fault line along which the global recovery splits into two blocs,” the IMF said in an update to its twice yearly World Economic Outlook report.
The IMF raised its growth forecast for advanced economies by 0.5 percentage point, to 5.6%, citing a climbing share of vaccinations and large spending packages designed to support the recovery.