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Wednesday, 28 July 2021

Global recovery uncertain as vaccine divide widens -IMF

IMF warns of “lopsided” global recovery over vaccine inequity: Unequal access to covid-19 vaccines are widening the recovery gap between advanced and developing economies especially amid the resurgence of new cases and the delta spread, theIMF warned in in its World Economic Outlook update yesterday. This comes as the fund revised upwards its projections for developed countries by 0.5% to 5.6% this year but lowered its growth forecasts for developing countries by 0.4% to 6.3%.

The problem in a nutshell: "Close to 40% of the population in advanced economies has been fully vaccinated, compared with 11% in emerging market economies, and a tiny fraction in low-income developing countries," IMF chief economist Gita Gopinath said at a presser.

Developing economies are likely to suffer from a double knockdown effect: Emerging markets are expected to get a double hit “from worsening pandemic dynamics and tighter external financial conditions,” which will put its toll on their recovery and weigh on global growth.

The global picture: The Fund has left its global growth forecast unchanged at 6%, but has raised its 2022 projection to 4.9% from 4.1% in April.

How to address the vaccine gap? The IMF is urging advanced countries to share their surplus of vaccine doses of at least 1 bn with poorer nations this year. Gopinath also reiterated calls for countries to sign up to its USD 50 bn plan that it thinks can fully vaccinate at least 40% of the world’s population in a matter of months.

The story got plenty of digital ink in the global press: Reuters | AP | FT | CNBC | New York Times.

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THE CLOSING BELL-

The EGX30 rose 0.6% at today’s close on turnover of EGP 2.06 bn (41% above the 90-day average). Local investors were net sellers. The index is down 0.8% YTD.

In the green: MM Group (+4.0%), Telecom Egypt (+3.1%) and Fawry (+3.0%).

In the red: Orascom Development Egypt (-1.6%), Emaar Misr (-1.3%) and AMOC (-0.6%).

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