Pandemic Economics
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Bibliographic details
- Authors: RUCHIR AGARWAL, GITA GOPINATH
- Published: December 2, 2021
Executive summary
- A broad-based economic recovery requires an end to the pandemic; ending the pandemic is a necessary prerequisite to restoring jobs, livelihoods, and economic well-being.
- The IMF released "A Proposal to End the COVID-19 Pandemic" in May 2021 as a detailed road map; it was endorsed by multilateral institutions and key stakeholders.
- Opinions expressed are those of the authors and do not necessarily reflect IMF policy.
Recent status and macroeconomic outlook
- In six months, the officially recorded global COVID-19 death toll has risen by about 50 percent and is now over 5 million; the actual death toll is estimated to be several times higher.
- Global recovery has continued, but momentum has weakened.
- October 2021 World Economic Outlook projections:
- Aggregate output for advanced economies would regain its pre-pandemic trend path in 2022 and exceed it by 0.9 percent in 2024.
- Output for emerging market and developing economies, excluding China, is expected to remain 5.5 percent below the pre-pandemic forecast in 2024.
- Divergence in prospects driven by disparities in vaccination rates and policy support ("the great vaccine divide").
- As of the end of October, about 65 percent of the population in advanced economies was fully vaccinated; booster shots were available in many of them.
- Vaccination rate was less than 2 percent among low-income countries.
- If COVID-19 has a prolonged impact, global GDP losses could rise to $5.3 trillion over five years relative to current projection, with several million more lives lost.
Road map targets and financing
- Three broad targets identified:
- Vaccinating at least 40 percent of the population in all countries by the end of 2021.
- Vaccinating 70 percent by the first half of 2022.
- Tracking and insuring against downside risks (new variants or supply-chain problems).
- Ensuring widespread access to tests, treatments, personal protective equipment, and other critical health tools to save lives.
- Financing needs and mechanisms:
- Commit to financing the new ACT-Accelerator budget of about $23 billion to ensure access to vaccines, tests, treatments, and personal protective equipment.
- The ACT-Accelerator is a partnership of the world’s international health organizations to fight COVID-19.
Progress and gaps (as of end of October)
- Progress toward key actions has been mixed; targets are still behind schedule.
- Some 75 to 80 nations, mostly in Africa, were not on track to meet the end-2021 40 percent vaccination target.
- Fifty-five of these countries will likely have problems primarily with supply.
- Twenty-four will have both supply and absorption-capacity issues.
Near-term actions recommended
- Immediately close the 550 million dose gap to achieve 40 percent coverage by:
- Accelerating existing dose donations to the COVID-19 Vaccines Global Access (COVAX) facility and pledging new donations.
- Executing dose swaps with COVAX and the African Union (deferring the delivery of doses intended for Group of Twenty [G20] countries to allow developing economies to move up in the queue).
- Eliminating restrictions on exports of vaccines and critical inputs.
- Maintain collective accountability through frequent engagement between Group of Seven advanced economies, the broader G20, and other key stakeholders.
Medium- to long-term actions and stewardship
- Expand regional manufacturing capacity of vaccines in developing economies and monitor risks.
- Lessons learned:
- Pandemic policy is economic policy; there is no durable end to the economic crisis without an end to the health crisis.
- Ending the pandemic is critical for global macroeconomic and financial stability and should be explicitly accounted for in economic analysis and surveillance.
- The world needs better stewardship of global public goods and much greater coordination and collective action for pandemic preparedness.
- The G20 High Level Independent Panel’s report on pandemic preparedness provides concrete steps for improved multilateralism in a pandemic era.
F&D Magazine — Pandemic Economics; RUCHIR AGARWAL, GITA GOPINATH; December 2021.
Content in this bundle
- اقتصاديات الجائحة
- La economía de la pandemia ● Finanzas y Desarrollo ● Diciembre de 2021
- L’économie en temps de pandémie
- Pandemic Economics
- 広範な経済回復にはパンデミックの収束が必須
- agarwal-gopinath
- 疫情经济学 ● 《金融与发展》● 2021年12月号