The International Monetary Fund (IMF) warned on October 27 about rising inflation and debt levels in many economies, and downside risks to the global economy, Anadolu Agency reported.
“The global recovery is underway amid uneven prospects and substantial downside risks,” the IMF said in its G-20 Report on Strong, Sustainable, Balanced, and Inclusive Growth.
“While new virus variants continue to spread, access to vaccines is lagging in many poorer economies, holding back recoveries and weighing on economic prospects, including from crisis-induced increases in unemployment.”
“In addition, a number of factors have led to a rise in inflation, elevated public and private debt levels have raised vulnerabilities, and climate change continues to threaten growth and livelihoods,” it added.
The IMF urged G20 countries to take immediate joint action and adopt measures to save lives and support economic recoveries, before the 20 of the world’s largest economies convene for a Rome summit on October 30 to 31.
It said some of the measures include closing financing gaps and sharing coronavirus vaccines doses to end the pandemic, providing financial help to developing countries, committing to a comprehensive package to reach net-zero carbon emissions by mid-century and addressing other long-standing global challenges.
Anadolu Agency also reported Managing Director Kristalina Georgieva said in a blog post that monetary policy should see through transitory increases in inflation but central banks should be prepared to act quickly if the risks of rising inflation expectations become tangible.
Noting that the IMF has recently reduced its global growth forecast to 5.9% for 2021, she said clear communication of policy plans is more important than ever to avoid adverse spillovers across borders.
“Carefully calibrating monetary and fiscal policies, combined with strong medium-term frameworks, can create more room for spending on healthcare and vulnerable people. These calibrations can deliver quick benefits through 2022,” she wrote.