The International Monetary Fund (IMF) is very concerned that the lockdown implemented last year may turn into a "Great Divergence" in 2021, IMF Managing Director Kristalina Georgieva said on Monday
WASHINGTON (Pakistan Point News / Sputnik - 22nd February, 2021) The International Monetary Fund (IMF) is very concerned that the lockdown implemented last year may turn into a "Great Divergence" in 2021, IMF Managing Director Kristalina Georgieva said on Monday.
"The latter is my deepest concern: that the Great Lockdown of 2020 could morph into a Great Divergence in 2021," Georgieva said in prepared remarks for the European Union Parliamentary Conference.
Georieva pointed out in the remarks that the developing world may face greater divergence as a result of differences in income levels, but the wealthy European states are at risk to experience such divergence as well.
Countries that traditionally rely on tourism, like Italy, Spain or Greece, are already experiencing economic contraction of more than 9 percent, which is 2.6 percent more than across the European Union, she said.
"We project that by the end of 2022, per capita income for the emerging markets of Central and Eastern Europe will be 3.8 percent below pre-crisis projections, compared to a shortfall of just 1.3 percent for the EU's advanced economies. A negative impact will be almost three times larger that will slow the pace of convergence," Georgieva said.
The IMF will closely cooperate with the European Union to support low-income countries who face the most serious crisis, Georgieva added.
