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IMF chief warns Omicron Covid version could slow recovery in global economy

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The IMF raised concerns that uneven distribution of vaccines was slowing the rebound. (file)

Washington:

IMF chief Kristalina Georgieva said on Friday that the new Omicron version of COVID-19 could slow the global economic recovery, as did the delta strain.

“A new version that could spread too fast could undermine confidence and, in that sense, we could see some downgrade in our October projections for global growth,” he told a Reuters event.

In its most recent World Economic Outlook, the fund projected global growth of 5.9 percent this year and 4.9 percent in 2022, but the United States and other major economies suffered sharp declines following the spread of the delta version “some friction.” Born,” said Georgieva.

“Even before this new version came out, we were concerned that the reform, while it continues, was losing some momentum,” the IMF chief said, noting that policymakers are now tackling new issues such as inflation.

The IMF’s most recent forecasts raised concerns that global supply chain issues and uneven distribution of vaccines may have slowed the rebound, leaving some countries behind.

Rising demand in many advanced economies as well as shortages of key components such as semiconductors has fueled a wave of price increases.

Less than two months later, Georgieva expressed confidence that inflation would not become a “runaway train”, but on Friday she said the US Federal Reserve will have to raise interest rates in 2022, not 2023, as the IMF does. had predicted earlier.

The Fed, which slashed the benchmark lending rate to zero in the early days of the pandemic, has already begun to pull back on its stimulus measures and has indicated it will speed up the process it will take to raise rates above zero. Will be in lifting position. by mid year.

“We believe the path to a policy rate hike can be a rapid one,” Georgieva said.

(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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