IMF Chief Economist Gita Gopinath on Wednesday said that as the global economy recovers from the pandemic, a great deal of uncertainty remains about new COVID-19 variants and increased inflation pressures in many countries.
Addressing an event organised by economic think-tank NCAER, Gopinath further said the pandemic has been aggravated by the recent advent of the Omicron variant of coronavirus.
”As the global economy recovers from the pandemic, a great deal of uncertainty remains about the new COVID-19 variants and increased inflation pressures in many countries,” NCAER said in a statement quoting Gopinath.
The new coronavirus variant, called B.1.1.529 or Omicron, was first reported to the World Health Organization (WHO) from South Africa on November 24.
Gopinath discussed how policymakers can best deal with these challenges in an increasingly uncertain environment.
”She flagged the persistent risk of the pandemic, which she said would continue even in 2022,” the statement said.
According to the statement, the other issues Gopinath raised include a significant divergence in recovery from the pandemic across nations, especially between the advanced and emerging economies.
”If allowed to spread uncontrolled, Omicron could lead to large-scale hospitalisations and further restrictions on mobility and travel, which will again have a negative impact on global economies, both advanced and emerging,” it said quoting Gopinath.
She also focused on the outlook for global growth in the coming year.
According to the statement, she noted that one of the positive findings was that though the pandemic has now been prevalent for nearly two years, it cannot be likened to the Great Depression of the early-20th century.
”The impact of the Great Depression was longer and more far-reaching — in contrast, after the COVID-19 pandemic, there has been an economic rebound even if an uneven one,” she added.