Gita Gopinath, chief economist of the International Monetary Fund, today said the cumulative global economic losses of the coronavirus pandemic are likely to touch $13.8 trillion through 2024 as against the previous estimate of $12.5 trillion. Earlier, the IMF, in its latest World Economic Outlook report, had cut India's economic growth forecast to 9 percent for the current fiscal year ending March 31, joining a host of agencies which have downgraded their projections on concerns over the Omicron variant of COVID-10.

"One of the main reasons for the downgrade of India's growth forecast for the ongoing fiscal is the spread of Omicron," Gopinath said, adding, "Growth projection for this fiscal and the next--FY2022-23--is at 9 percent for India. The postponement of recovery in FY22 fed into the upgrade in growth forecast for FY23 for India."

The IMF had also said that global growth is expected to moderate from 5.9 percent in 2021 to 4.4 percent in 2022, half-a-percentage point lower for 2022 than in the October's WEO, largely reflecting forecast markdowns in the two largest economies--the US and China.

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IMF raises India’s growth forecast to 9% for FY23; global growth seen lower at 4.4% this year

"A total of 86 countries did not meet the target of having at least 40% their population vaccinated by end of 2021. The problem is now shifting toward the absorptive capacity of countries with regard to the vaccine," she said.

The rapid spread of Omicron has led to renewed mobility restrictions in many countries and increased labour shortages, she said. Supply disruptions still weigh on activity and are contributing to higher inflation, adding to pressures from strong demand and elevated food and energy prices, Gopinath wrote.

"Low-income countries need the support, and health infra to administer shots and address vaccine hesitancy; 2020 and 2021 was when countries faced a crisis like no other. The problem was not a typical balance of payment crisis, but that of countries being hit by an exogenous shock," she said.

Gopinath further said the IMF had 20-odd traditional lending programmes in addition to emergency financing to support countries. "A Russia-Ukraine conflict would likely lead to higher energy cost and keep inflation elevated for longer," Gopinath said, adding that continuing global recovery faces multiple challenges as the pandemic enters its third year.

With PTI inputs

(Edited by : Vijay Anand)