VENICE – Treasury Secretary Janet L. Yellen said Sunday she was concerned that coronavirus variants could slow global economic recovery and called for urgent efforts to accelerate vaccine use around the world.
Your comments on the conclusion of a meeting of Finance Ministers of the Group of 20 Nations came when the highly contagious Delta variant of the coronavirus triggered outbreaks among unvaccinated populations in countries like Australia, Indonesia, Malaysia and Portugal. Delta is now also the dominant variant in the USA.
“We are very concerned about the Delta variant and other variants that are emerging that could threaten recovery,” said Ms. Yellen. “We are a networked global economy. What happens in any part of the world affects all other countries. “
Many cities and countries have begun declaring victory over the pandemic, easing restrictions and returning to normal life. But Ms. Yellen warned that the public health crisis was not over.
She said the world’s top economic officials spent much of the weekend in Venice discussing how they could improve vaccine distribution with the goal of vaccinating 70 percent of the world by next year. Ms. Yellen noted that many countries have successfully funded vaccine purchases but lack the logistics to get them into people’s arms.
“We have to do more and be more effective,” she said.
The proliferation of variants has begun to dampen optimism about the course of the recovery.
Capital Economics analysts announced this week that they intend to cut their economic growth outlook for the year to below 6 percent.
The proliferation of new varieties of coronavirus has “raised doubts about the pace of real economic growth in the second half of this year and beyond,” wrote Paul Ashworth, chief economist for North America at Capital Economics, in a research note.
The International Monetary Fund said it was sticking to its 6 percent global growth forecast this year, but warned that growth would be stifled in developing countries where infection rates are skyrocketing.
“The divergence between economies is worsening,” said IMF Managing Director Kristalina Georgieva on Saturday. “Essentially, the world is facing a two-pronged recovery.”
Some finance ministers also raised concerns over the weekend that variants and slow vaccine uptake could turn the recovery on its head. This concern was highlighted in the Group’s joint statement as a downside risk to the world economy.
“The only hurdle on the way to a quick, solid economic recovery is the risk of a new wave of pandemics,” said French Finance Minister Bruno Le Maire. “We all need to improve our vaccination performance.”
The IMF Executive Board last week approved a plan to provide $ 650 billion in reserve funds that countries could use to buy vaccines and fund health initiatives.
Ms. Yellen said she urged her group of 20 colleagues to expedite the “fair” delivery and distribution of vaccines, diagnostics and therapeutics to ensure that low- and middle-income countries could fight the virus flare-up.
Policy makers at the weekend’s meeting also spent time focusing on new investments in preparation for future pandemics. Ms. Yellen said that while this is important, more needs to be done in the short term.
“Variants certainly pose a threat to the entire globe,” she said.