WASHINGTON – The International Monetary Fund warned the government of the impact of the COVID-19 pandemic and rising inflation on the overall global economic recovery.
The International Monetary Fund decreased their forecasted global growth to 5.9% in July.
Last Thursday, the agency called on wealthier countries to pool its forces to increase vaccination rates in poorer countries. The agency also encourages the Federal Reserve to ready itself for potential inflation pressures.
According to the International Monetary Fund, the group continues to increase poverty and inequality amongst countries. As a result, the overall economic recovery continues to tilt downwards. Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell were the US representatives in the finance meetings.
Although wealthier countries already have a 60% vaccination rate, poorer countries only have a 4% vaccination rate.
The International Monetary Fund also encouraged the wealthy nations to have at least 40% of all countries vaccinated by the end of the year.
Finance officials offered to increase the supply of COVID-19 vaccines in poor and developing countries. The government also offered to remove any financing constraints to make it available for developing countries.
Furthermore, finance officials encouraged the Federal Reserve and central banks to “act appropriately” when price spikes worsened. The Federal Reserve showed signs of potentially decreasing the support it placed in the economy during the COVID-19 economic recession.
The Federal Reserve’s move to decrease government support can increase interest rates, eventually increasing economic growth and a more controlled inflation rate.