An estimated 65 to 75 million more people in emerging and low-income developing countries will fall into poverty at the end of 2021 than would have been the case without the pandemic, this is according to the International Monetary Fund (IMF) in its latest fiscal monitor finds released here Wednesday.
The Fund says emerging and low-income developing economies face a more challenging outlook as large portions of the population remain unvaccinated in many countries.
The COVID-19 pandemic, the IMF observed is expected to have long-lasting negative impacts and lead to a reduction in fiscal revenues relative to pre-pandemic trends especially in low-income developing countries.
According to the fund, the situation will make it difficult for governments in such countries to pursue their developmental agenda.
“This will make it more challenging to pursue the development agenda. Already more than in advanced economies, fiscal support is waning further due to tightening financial constraints,” the Fund said.
The risk the global financial body asserts stem from virus variants and low vaccine coverage, large debts and government financing, increased borrowing costs as well as sudden rise in interest rates in advanced economies.
It urged governments to put in greater efforts to accelerate vaccination around the globe as that would spur growth prospects and boost public finances as well as build resilience and strengthen cooperation.
It further called on countries to calibrate policies to the pandemic and to economic development prospects, prioritize the transformation of the economy to make it smarter, greener, and more resilient and inclusive as well as gradually increase tax revenues where necessary and improve the efficiency of spending.
With the pandemic, global debt in 2020, according to the IMF jumped by 14 percent to a record high of 226 trillion U. S. dollars –which includes both public and non-financial private sector debt.
Public debt now amounts to 88 trillion U. S. dollars, a value close to 100 percent of gross domestic product (GDP).
In 2021 and 2022, the Fund is predicting that public debt is expected to decline by about one percentage point of GDP each year, after which it will stabilize at about 97 percent of GDP. Enditem
Source: News Ghana/IMF