Bangladeshis among IMF-predicted 80m more hardcore poor worldwide

An additional 80-million people of low-income countries, including Bangladesh, are likely to enter into Covid-induced extreme poverty during 2020-21, the International Monetary Fund (IMF) has predicted.

According to the IMF's World Economic Outlook (WEO) Update released on Tuesday, slow vaccine rollout in low-income countries is the main factor for slower economic recovery and poverty.

IMF chief economist Gita Gopinath says the 2021 growth forecast for the group of low-income developing countries is marked down 0.4 percentage point for slow vaccine rollout.

She was addressing a press briefing from the IMF's Washington DC headquarters.

Global economy is projected to grow 6.0 per cent in 2021 and 4.9 per cent in 2022, which is unchanged from the April 2021 WEO.

But the growth projection for developing and emerging economies by 0.4 percentage points is due to the slow rollout of vaccine and possible inflationary pressure.

However, the IMF has not projected any gross domestic product (GDP) growth for Bangladesh in its outlook.

In the April 2021 WEO, the multilateral lender had projected 5.0-per cent GDP growth for Bangladesh.

"Slower-than-anticipated vaccine rollout would allow the virus to mutate further… A double hit to emerging market and developing economies from worsening pandemic dynamics and tighter external financial conditions would severely set back their recovery and drag global growth below this outlook's baseline," Ms Gopinath said.

"Vaccine access has emerged as the principal fault line along which global recovery splits into two blocs: those that can look forward to further normalisation of activity later this year (almost all advanced economies) and those that will still face resurgent infections and rising COVID death tolls."

The recovery, however, is not assured even in countries where infections are currently very low so long as the virus circulates elsewhere, the economist added.

Mr Gopinath says IMF staff analysis indicates that low-income developing countries will require nearly $200 billion to combat the pandemic and another $250 billion to regain their pre-pandemic convergence paths.

According to the WEO Update, new variants are assumed to lead to a new infection wave in emerging market and developing economies in the second half of 2021.

It is assumed that new more infectious variants pose risks not just to those countries with low vaccination rates, but also to many advanced economies…

Global commodity prices are expected to increase at a significantly faster pace than assumed in the April 2021 WEO, according to the latest outlook.

"Amid the strengthening global recovery, oil prices are expected to rise close to 60 per cent above their low base in 2020. Non-oil commodity prices are expected to rise close to 30 per cent above 2020 levels…"

On the slow vaccine rollout rate and its unequal distribution, the IMF said as of the end of June 2021, an estimated 3.0-billion doses had been administered worldwide, with 75 per cent in advanced economies and China.

In low-income countries, less than 1.0 per cent of the population had received a single dose, it added.

Ms Gopinath suggested that multilateral action was a vital role to play in diminishing divergences and strengthening global prospects.

"The immediate priority is to deploy vaccines equitably worldwide. A $50 billion IMF staff proposal, jointly endorsed by the World Health Organisation, the World Trade Organisation and the World Bank, provides clear targets and pragmatic actions at a feasible cost to end the pandemic."