From Isaac Anumihe, Abuja
Following anticipated losses by emerging markets and developing economies due to slower vaccine rollouts and less policy support compared to advanced economies, the International Monetary Fund (IMF) has made available $650 billion for financially-constrained countries.
While granting the countries the drawing rights to the fund, the IMF urged the international community to resolve trade tensions and reverse the trade restrictions implemented between 2018 and 2019 as well as strengthen the rules-based multilateral trading system.
It also enjoined the international community to complete an agreement on a global minimum for corporate taxes that halts a race to the bottom and helps bolster finances to fund critical public investments.
In its World Economic Outlook (WEO) forecast, the fund stated that beyond 2022, global growth is projected to moderate to 3.3 per cent over the medium term.
‘Advanced economy output is forecast to exceed pre-pandemic medium-term projections—largely reflecting sizable anticipated further policy support in the United States that includes measures to increase potential. By contrast, persistent output losses are anticipated for the emerging market and developing economy group due to slower vaccine rollouts and generally less policy support compared to advanced economies,’ the MF, observed, adding that headline inflation rates have increased rapidly in
the United States and in some emerging markets.
On the fiscal policy, IMF said that the imperatives will depend on the stage of the pandemic while the health-related spending remains the priority.
‘As the pandemic persists and fiscal space is limited in some countries, lifelines and transfers will need to become increasingly targeted to the worst affected and provide retraining and support for reallocation. Where health metrics permit, emphasis should shift toward measures to secure the recovery and invest in longer-term structural goals.
‘The 70 per cent coverage target by mid-2022 is driven by the health and economic imperatives of stopping the pandemic as rapidly as possible. This is higher than the originally proposed 60 per cent target for mid-2022 given the rise of more infectious variants.
‘The revised target is consistent with the downside risk scenario envisioned in the original $50 billion IMF staff proposal released in May 2021, under which 1 billion additional doses were designated for low- and lower-middle-income countries — and is aligned with the updated World Health Organisation (WHO) global vaccination strategy,’ the international body said.
