IMF: Urgent Action Needed to Address a Worsening ‘Two-Track’ Recovery

By Kristalina Georgieva

When G-20 finance ministers and central bank governors gather in Venice this week, they can take inspiration from the city’s unbreakable spirit.

As the world’s first international financial center, Venice has faced the vagaries of economic fortunes over centuries, while being directly affected by climate change. This extraordinary resilience is needed more than ever as policymakers continue to face extraordinary challenges.

The good news is that the global recovery is progressing broadly in line with the IMF’s April projections of 6 percent growth this year. After a crisis like no other, we are seeing in some countries a recovery like no other, propelled by a combination of strong fiscal and monetary policy support and rapid vaccinations.

For the United States, for example, we project 7 percent growth this year, the highest since 1984. The recovery is similarly gaining momentum in China, the euro area, and a handful of other advanced and emerging economies.

But incoming data also confirm a deepening divergence in economic fortunes, with a large number of countries falling further behind.

The world is facing a worsening two-track recovery, driven by dramatic differences in vaccine availability, infection rates, and the ability to provide policy support. It is a critical moment that calls for urgent action by the G20 and policymakers across the globe.

As our note to the G20 meeting points out, speed is of the essence. We estimate that faster access to vaccinations for high-risk populations could potentially save more than half a million lives in the next six months alone.

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