Transcript

World Economic Outlook Briefing Transcript

January 25, 2022

 Moderator:

RAPHAEL ANSPACH

Communications Department

Panelists:

GITA GOPINATH

Economic Counselor and Director, Research Department

PETYA KOEVA BROOKS

Deputy Director, Research Department

MALHAR NABAR

Division Chief, Research Department

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P R O C E E D I N G S

MR. ANSPACH: Good morning, everyone. Welcome to this press conference on the launch of the International Monetary Fund's World Economic Outlook update. We hope that you are doing well and staying safe.

My name is Raphael Anspach with the Communications Department. I'm delighted to be joined by our speakers today, Gita Gopinath, First Acting Managing Director, Petya Koeva Brooks, Deputy Director of the Research Department, and Malhar Nabar, head of the World Economic Studies Division in the Research Department.

Gita, who headed the Research Department's work on this latest round of forecasts and analysis, will lead us through the WEO press conference one last time. Pierre-Olivier Gourinchas, the IMF's new economic counselor, will be joining us for the next round in April during the Spring Meetings. With that, I would like to turn the floor over to Gita. Gita, please.

MS. GOPINATH: Thank you, Raphael, and thanks, everyone, for joining for this update on the World Economic Outlook. The continuing global recovery faces multiple challenges as the pandemic enters its third year. The Omicron Variant has let to renewed mobility restrictions in many countries and increased labor shortages. Supply disruptions still weigh on activity and are contributing to higher inflation, adding to pressures from strong demand and elevated food and energy prices. Moreover, record debt and rising inflation constrain the ability of many countries to address renewed disruptions.

Some challenges, however, could be shorter lived than others. The new variant is associated with less severe illness than the Delta Variant and record surge infections is expected to decline relatively quickly. The IMF's latest World Economic Outlook therefore anticipates that while Omicron will weigh on activity on activity in the first quarter of this year, this effect will fade starting the second quarter.

Other challenges and policy pivots are expected to have a greater impact on the outlook. We project global growth this year at 4.4 percent, which is .5 percentage points lower than previously forecast, mainly because of downgrades for the United States and China. Now, in the case of the United States, this reflects lower prospects of legislating the build back better fiscal package and earlier withdrawal of extraordinary monetary accommodation and continued supply disruptions. China's downgrade reflects continued retrenchment of the real estate sector and weaker than expected recovery in private consumption. We expect global growth to slow to 3.8 percent in 2023. We have revised up our 2022 inflation forecast for both advanced and emerging market and developing economies with elevated price pressures expected to persist for longer.

Supply/demand imbalances are assumed to decline over this year based on expectations of improved supply as demand gradually re-balances from goods to services and extraordinary policy support is withdrawn. Moreover, energy and food prices are expected to grow at more moderate rates in 2022. Assuming inflation expectations remain anchored, inflation is therefore expected to subside in 2023.

Even as recoveries continue, the troubling divergence in prospects across countries persists. While advanced economies are projected to return to pre-pandemic trend this year, several emerging markets and developing economies are projected to have sizable output losses into the medium-term. The number of people leaving in extreme poverty is estimated to have been around 70 million higher than pre-pandemic trends last year.

Now, the forecast is subject to high uncertainty and risks overall are to the downside. The emergence of deadlier variants could prolong the crisis, China's zero Covid strategy could exacerbate global supply disruptions, and the financial stress in the country's real estate sector spreads through the broader economy. The ramifications will be felt widely. Higher inflation surprises in the U.S. could elicit aggressive monetary tightening by the Federal Reserve and sharply tightened global financial conditions. Rising geopolitical tensions and social unrest also pose risks to the outlook.

At the start of the third year of the pandemic the global death toll has risen to 5.5 million deaths and the accompanying economic losses are expected to be close to $13.8 trillion through 2024 relative to pre-pandemic forecasts. Now, these numbers would have been much worse had it not been for the extraordinary work of scientists, of the medical community, and the swift and aggressive policy responses across the world. However, much work remains to ensure the losses are contained and to reduce wide disparities in recovery prospects across countries.

To start with, it is vital to break the hold of the pandemic. This will require a global effort to ensure widespread vaccination, testing, and access to therapeutics, including the newly developed antiviral medications. As of now, only 4 percent of the population of low-income countries are fully vaccinated versus 70 percent in high-income countries. In addition to ensuring predictable supply of vaccines for low-income developing countries, assistance should be provided to boost absorptive capacity and improve health infrastructure. It is urgent to close the around $23 billion financing gap for the ACT Accelerator and to speed up diversification of global production of medical tools, especially in Africa.

At the national level, policies should remain tailored to country's specific circumstances, including the extent of recovery of underlying inflationary pressures and available policy space. Both fiscal and monetary policies will need to work in tandem to achieve economic goals. Given the high level of uncertainty, policies must remain agile and adapt incoming economic data. With policy space diminished in many economies and strong recoveries underway in others, fiscal deficits in most countries are project to shrink this year. The fiscal priority should continue to be the health sector and transfers should be effectively targeted to the worst affected. All initiatives will need to be embedded in medium-term fiscal frameworks to ensure public debt remains sustainable.

Monetary policy is at a critical juncture in most countries where inflation is broad based, alongside a strong recovery, like in the United States, or high inflation runs the risk of becoming entrenched as in some emerging market and developing economies and advanced economies. Extraordinary monetary policy support should be with withdrawn.

Several central banks have already begun raising interest rates to get ahead of price pressures. It is key to communicate well the policy transition toward a tightening stance to ensure orderly market reaction. Where core inflationary pressures remain subdued and recovery is incomplete, monetary policy can remain accommodative.

Now, as the monetary stance tightens more broadly this year, economies will need to adapt to a global environment of higher interest rates. Emerging market and developing economies with large foreign currency borrowing and external financing needs should prepare for possible turbulence in financial markets by extending debt maturities as feasible and containing currency mismatches. Exchange range flexibility can help with needed macroeconomic adjustment. In some cases, foreign exchange intervention and temporary capital flow measures may be needed to provide monetary policy with the space to focus on domestic conditions.

With interest rates rising, low-income countries, of which 60 percent are already in or at high risk of debt distress, will find it increasingly difficult to service their debt. The G20 common framework needs to be revamped to deliver more quickly on debt restructuring and G20 creditors and private creditors should suspend debt service while the restructurings are being negotiated.

Policy initiatives are also needed to reverse the large learning losses suffered by children, especially in developing countries.

On climate, a bigger push is needed to get to net zero carbon emissions by 2050 with carbon pricing mechanisms, green infrastructure investment, research subsidies, and financing initiatives, so that all countries can invest in climate change mitigation and adaptation measures.

Now, the last two years reaffirmed that this crisis and the ongoing recovery is like no other. Policy makers must vigilantly monitor a broad swath of incoming economic data, prepare for contingencies, and be ready to communicate and execute policy changes at short notice. In parallel, bold and effective international cooperation should ensure that this is the year the world escapes the grip of the pandemic.

Thank you.

MR. ANSPACH : Thanks very much, Gita. Thank you, everybody, for joining us and for already submitting your questions. I can see a number of them here. But before I turn to the questions online, I would like to turn to a few colleagues that have connected to Webex.

QUESTIONER : Thank you. Thank you for doing this. Thank you, Gita.

I wanted to ask you about your forecast for inflation and the sort of sense that you have that the pressure will ease throughout 2022 as energy crisis and food prices stabilized. What impact would a conflict with Russia have? You know, the U.S. and its allies have threatened significant and very severe sanctions and economic consequences if Russia invades Ukraine that would obviously have a disruptive effect on energy markets. How does that factor into how you calculate this and what the impact would be? And then also if I could just draw you out on your concern about debt and the common framework. You know, I think the IMF is going to be meeting with Chad and the creditors private and officials before the end of the month and there's sort of, I guess some more movement on Chad. Have you been contacted by any other countries that are seeking debt treatment and are waiting for that process to unfold? And are you getting any [inaudible] on these repeated calls to, you know, accelerate the progress on the treatment?

MS. GOPINATH : Thank you, so on the inflation outlook, we've seen headline inflation go up pretty much everywhere in the world. And that has been driven by an increase in commodity prices, energy prices and food prices, especially from the last year. So, to your question about what would be the impact of a conflict between Russia and Ukraine, you know, consequences for the energy markets would be, likely would be a further increase in prices of oil and natural gas and therefore, of energy costs more broadly for many countries in the world. So, in terms of headline inflation numbers, this certainly could keep headline inflation much more elevated for longer. Of course, we are hoping like all of the international community is, that there can be a peaceful resolution to this issue.

On the question of debt and the common framework, indeed, you know, the common framework was put together precisely to help with a coordination problem among creditors to bring together the Paris Club creditors, the non-Paris Club creditors, the private sectors to be able to have speedy debt resolution. You know, three countries have approached the G20 to use this framework, Chad is one of them. The most progress has been made on Chad. But in our opinion, of course, there is a lot more that needs to be done. It is going slowly. We need to pick up the pace. There has to be greater clarity of the different systems. There has to be an improved way of getting private sector to get involved in this. Much more action is needed on that front. And like I said, in the time when these negotiations are going on, it's our view that the G20 creditors and the private creditors should suspend their debt servicing during the period of the negotiations.

QUESTIONER: Yes, good morning everyone and thank you for taking my question. We have seen more volatility in the markets and I was wondering how concerned are you about a potential correction in the markets in the short term?

MS. GOPINATH : Yeah, we are certainly living in very turbulent times and this is the year when major central banks, including the U.S. Fed is going to exit highly accommodative monetary policies and that is needed given the strength of the recovery in the U.S. and the inflation pressures that we are seeing. So, we should expect interest rates to go up. There is a tremendous amount of uncertainty but how much would it go up by and how many rate hikes it would take.

And all of that is affecting markets in addition to other developments like the geopolitical tensions that we are seeing around the world. But that is a factor that is going to weigh on markets. We have been of the view and we've said this in previous global financial stability reports that markets look overvalued in several spots. And there is a high level of exuberance and therefore there could be market corrections. So, you know, one would expect that as interest rates go up, we would see corrections in markets. The hope is that this will stay orderly. And as long as there can be well-telegraphed communication from the U.S. Fed about their monetary policy path, about reasons why they are taking the actions that they're doing, then that should certainly help with having a more orderly correction in markets.

QUESTIONER: Yeah, to start, I'd like to apologize for the embargo breach. You know, the time gap, I calculated it two and a half hours while addressing my story it began 6:30 instead of 7:30 India time. Although I corrected it immediately after that but someone overlooked it.

MR. ANSPACH: All right. Thanks, for that.

QUESTIONER: I wanted to explain to that. My apologies for that. I wanted to ask Gita about India’s economic situation and how it had changed from last time and you had made some changes this time that led this projection as well. Can you give us your insight into it.

MS. GOPINATH : So we have a -- if you look at the '21-'22 fiscal year for that, we have a slight downgrade of -0.5 percentage points and for the next fiscal year of '22-'23, we have a slight upgrade of 0.5 percentage points. So, growth for the previous fiscal is now at 9 percent and for this year now is at 9 percent, so we moved it up slightly.

The main reason for the downgrade for the '21-'22 fiscal comes from omicron and because this first quarter of this year there have been some -- there have been localized lockdowns and restrictions in activity and mobility. And that has an impact on the growth numbers which is why we have a slight downgrade. And that postponement of the recovery is what is feeding into a slight upgrade for this following year.

MR. ANSPACH : Thank you. All right, so I'm going to turn to a couple of questions online here that we received. First, I'm going to turn to a couple of questions on the UK. So the question is why is the UK's downgrade relatively small compared to other countries? Is the UK somehow better able to cope with rising inflation?

And then a second question, the UK faces supply constraints in labor and energy. Energy bills are set to rise sharply in April alongside tax rises. Should the UK government offer support to households and businesses to cushion them from this shock to their living standards?

MS. GOPINATH: So, in terms of the upgrade and downgrades that we have, of course there are multiple factors that go into it. In terms of the recovery, if you look at the recovery in the UK is until the end of last year as a whole is somewhat weaker than for instance if you look at what we have in the U.S. The U.S. is back to pre-pandemic trend, the UK is definitely not back to pre-pandemic trend. It's supposed to be back to pre-pandemic levels this year. So, you know, some of the adjustments reflect the fact, it depends upon the stage, how advanced the country is in their recovery, how much it has more that it can go. So, there are multiple factors that come in there. In terms of the inflation prospects as we've seen, inflation has gone up quite sizably in the UK. There are multiple factors for it. The high energy prices have certainly been an important recent factor for inflation going up but inflation is certainly spreading to other to kind of core areas. So, services inflation is also going up in the UK. And labor market shortages are common there as it is in the U.S.

In terms of your question of the government providing support for low income households to deal with this big increase in the cost of living. I think we do think that very targeted, well-targeted support, it's important that this should be well-targeted support to highly vulnerable households who are having to face with very high costs increases, living cost increases will be useful. And as you mentioned, you know, these energy costs are going to go up in April further so this is something to keep in mind.

MR. ANSPACH : I'm going to stay in Europe, now a question on Germany. What explains the strong growth revision for Germany?

MS. GOPINATH : So for Germany, what we saw last year was the second half of last year came in weak and unexpected. So the last two quarters, because of the supply disruptions that have been prolonged and given the reliance of Germany, the dependance of Germany in the auto sector and the supply disruptions there, we saw a significant downgrade. And that's feeding into this year. There is some small effect from omicron but that's a small part of it. Let me see if Petya would like to come in on Germany or on something more.

MS. KOEVA BROOKS: Perhaps just to add that in the second half of this year is when we're expecting growth to really pick up. And the excess household savings are expected to provide quite a lot of support to growth again in the second half of this year.

QUESTIONER: Hi, thank you for doing this. There are concerns that an eventual new arrangement with Argentina won't be sound enough or credible enough to solve the problems of the economy. It will only kick the can down the road. What do you think it will take to make it a credible program?

MS. GOPINATH : Thank you. As you know, we are working very closely with the Argentine authorities to come up with a program that will help the people of Argentina; and that, as you said, will require a program that is sound and credible and that addresses the imbalances that the country has. So, we have to improve on the imbalances so that we can help the Argentines recover, get out of the difficulties that they are facing. We’re working very closely with the authorities. We understand that the social and economic situation is challenging, which is why we are adopting a flexible and pragmatic approach; and, we know, we hope we will make even more progress in the next days.

QUESTIONER: Yes, thank you very much. I just wanted to ask two questions focused on the developing world. One, is there an expectation of defaults in the developing markets if the Fed hikes rates more aggressively; and then, secondly, on vaccines. I wanted to understand your view on the constraints. I noticed in the report that there’s an expectation that some countries still won’t hit the 70% targets even this year. Where do you identify the constraints in the vaccination, global vaccination system, at this point?

MS. GOPINATH : Yes. So, on your question on debt and defaults in developing countries. We have about 60% of low-income companies that we would describe as being either already in debt distress or in high risk of debt distress. Several low-income countries are paying almost 3% of the GDP for debt-service payments; and as interest rates go up, that is going to go up further. So, I think, this is, indeed, a period of where one has to be very, you know, careful about what’s going on in terms of debt-serving abilities of countries. The common framework is designed to help countries that have unsustainable levels of debt, restructure it, bring it down to a sustainable path; and it has made some progress, but a lot more is needed to actually get it to deliver on its promise. And the debt-service suspension initiative ended last year. So, that space doesn’t exist either. So, this is something that we are paying close attention to.

In terms of your question on vaccinations and what the main constraints are, so, just in terms of the numbers, last year, the goal that was set in the IMF pandemic plan ‑‑ it was adopted by all of the organizations, and main institutions of the world, globally ‑‑ was to get all countries to 40% coverage by the end of 2021. We ended 2021 with 86 countries not having met that target, and most of them by far ‑‑ like low-income countries had only 4% fully vaccinated by the end of last year. So, what were the problems for it? I would say that, initially, it was the fact that there was not sufficient deliveries; there was not enough visibility on when the deliveries would happen; when the vaccines came, they did not have enough shelf life; but now, increasingly, I’d say the problem is now shifting towards absorptive capacities in countries. So, therefore, in addition to continuing to ensure that there is a sufficient supply of vaccines, another very critical area is to make sure that countries have the support, low-income countries have the support, to give shots in arms, which is to make sure that they have the health infrastructure to be able to administer the shorts and also to address vaccine hesitancy, which is becoming an issue in these countries. So, that’s what will be needed. I will also flag that the approach has to be even more holistic than just vaccines. There has to be much more widespread testing and access to therapeutics. We have the new antiviral medications, but they are not going to be very helpful if you can’t diagnose somebody as having COVID early-on. So, that requires timely testing, and this is why closing that financing gap of 23 billion for the ACT-accelerator, of which about 16 billion should be in the form of grants, is absolutely urgent.

QUESTIONER: Yes; good morning. I wanted to ask Dr. Gopinath about the criticism from Kenneth Rogoff recently on project syndicate and whether the IMF is pivoting now; whether the IMF considers that the pandemic is entering a new stage now where lending and financing will be more focused on its normal, and it’s historical, conditional lending, or whether we will see a continuance of the continuation of the emergency lending that has marked much of 2020 and 2021?

MS. GOPINATH: You know, the year of 2020 and an important part of 2021, was a year when countries faced a crisis like no other. They were struck by a pandemic; the problem in the country was not that they had unsustainable fiscal situation; it was not a typical balance of payments crisis; but it was a crisis where countries got hit by an exogenous shock that, basically, led down to shutdown of economic activity everywhere in the world. In that environment, the best response is to use the IMF’s facility, which is of an emergency financing facility which exist, and this would be the perfect context to use it in, and it has, absolutely, served the purpose of making sure the financing was made available quickly to countries in need that they could then use for helping with the health crisis and their economic crisis. Now, as we get out of this phase of the crisis, we certainly ‑‑ but, I mean also to be clear -- the year of 2021, we also had about 20-odd traditional IMF lending programs at the same time that we were doing these emergency financing. But, indeed, as we moved out of, I guess, the most critical phase of the pandemic, we will be increasingly doing the most traditional upper credit tranche lending programs which would have the conditionalities that come with helping countries solve difficult problems in those country, the kind of imbalances that we need to address to be able to have sustainable growth and market access.

QUESTIONER: Thank you and thank you for having me. My question is basically on Nigeria. I was going to ask on the recent decision by Nigerian’s government to reverse its subsidy removal. I know IMF, in the past, has been vocal about removing of subsidy and ‑‑ I mean Nigeria has given some assurances ‑‑ however, yesterday actually reversed the decision to continue subsidy. And also you mentioned, Gita, earlier there will be some sort of debt distress for low-income economies. I was wondering if you can tell us the state of Nigeria’s debts and if that sustainability going forward? Yes, and then what’s and prompted there will be gross projections if nothing really was changed? Thank you.

MS. GOPINATH : I think this would be great for Malhar, if you’d like to take it.

MR. NABAR : Sure. So, perhaps to start with growth projections. We, as you noted, we have an unchanged growth projection for Nigeria for 2022, and this reflects offsetting effects. We had a slightly stronger outcome in the second half of last year, especially in the non-oil sector; and this momentum is expected to continue into 2022; but now with the external head winds that should be the impacts of Omicron, we do expect some drag going forward which will counter-balance the strong momentum going into this year.

In terms of the subsidies, we have for long, not just for Nigeria but for many low-income countries that have these subsidy schemes in place, we have called for scaling back poorly targeted subsidies to create fiscal space that can then be repurposed for meeting vital health and social spending needs; and that recommendation applies in the case of Nigeria too.

In terms of the debt situation, among low-income countries, Nigeria actually has a -- in terms of its public debt -- the GDP ratio, its actually, relatively on the low side compared to other low-income countries. So, going forward that is certainly providing a little bit more space to provide the needed support for combating the health emergency, and also putting Nigeria on the path to a sustainable recovery.

MR. ANSPACH : All right; thank you. I’m going to turn back to online and now we’ll go to the Mena Region; Two questions: What are the main reasons behind the IMF rejections for the Mena Region in 2022; and what is the IMF expectations for Egypt’s growth, and what are the key drivers of it?

MS. GOPINATH: Petya could you take that?

MS. KOEVA BROOKS : So, the Mena region is one where we actually have an upgrade for this year. So, we’re expecting growth to be 4.4, which is an upgrade of .3. And the main reason for that is the improved prospects for growth in oil exporters, which is, again, linked directly to the higher oil prices. When we look at the group of oil importers, there we have unchanged numbers, again, as a group. But there is one country that stands out in the group of the oil importers, and that is Egypt. And for Egypt, we have an upgrade of .4 this year; so, we are projecting growth to be 5.6. So, for the Egyptian economy, I think it’s fair to say that the impact of the pandemic has been well managed. The economic impact has been well managed. So, we have seen stronger data coming up, which is the main reason behind our upgrade. At the same time, there's a lot of uncertainty about the impact of Omicron on the recovering tourist sector. So, the hope is that that impact is going to be short-lived, and the risk is that it could be larger.

MR. ANSPACH: I'm going to stay online here, and this is a question on Latin America and Brazil and Mexico, more specifically. The question is, could you speak to the reductions in the 2022 growth estimates for Brazil and Mexico? The report ties this to the expected lower external demand; however, are there other major factors contributing to these sizable downward revisions, and are these issues hitting the rest of Latin America as hard?

MS. GOPINATH: Yes, so we do have significant downgrades both for Brazil and Mexico. In the case of Brazil, it reflects firstly, in some sense, actually the strength of the recovery that's already happened. So, Brazil got back to pre-pandemic levels of activity by the start of last year. And so, it's had a strong recovery, so as we are reverting back to more normal levels of growth that comes with the new numbers that we have. So that's one factor. But the other factor is there has been a sizable increase in monetary policy rates in Brazil, quite substantially, to address the inflation pressures, and the effect of that we expect will show up in 2022, and therefore that's another reason for the downgrade. Another factor is somewhat the increase in export prices that Brazil saw moderating, for instance, if you look at the price of iron ore.

In the case of Mexico, what we have is, again, the last two quarters that came in weak -- second half of last year that came in weaker than expected because of, again, supply disruptions and so that carries forward a bit to 2022. You do have the virus variant too that countries are grappling with, and there is also some slight tightening in monetary conditions in Mexico. So, these are all factors that are weighing. More generally, of course, we also pay attention to medium-term growth and we will say more about that in the spring. But, again, countries should also start looking ahead to addressing, you know, trying to be able to bring good levels of medium-term growth, and that has been a challenge for several countries in Latin America.

QUESTIONER: I had a question on the IMF has been talking about the two-way recovery between a best economy and emerging market economies. So how this issue may intensify during the process of the tightening monetary policies among major central banks while we're still fighting against this pandemic, and in particular, could you talk about the impact of that rate hikes for China.

MS. GOPINATH : You know, unfortunately the diverging recoveries, the diversions that we've seen in recovery prospects across countries, has persisted. It's still very much the case. We've seen advanced economies are expected to be back to pre-pandemic trend levels this year, while for many emerging and developing economies, not all, because they're not all the same, but for several of them, we have that even in the medium-term, which is 2024 and '25, out there, there would be significant output losses from the pandemic. So that is an issue. Now, we are entering a period where global interest rates will start going up as major central banks around the world start raising interest rates. That also then can create headwinds for the recovery for some emerging and developing economies. Again, I would not put like, a blanket statement on all of them. There are countries that have large amounts of foreign exchange reserves. They don't rely much on foreign currency borrowing, and those would be in better shape than countries that do have large amounts of external financing that rely on short-term foreign exchange borrowing that don't have enough reserves. And so those countries would be much more subject to the turbulence in markets.

In terms of the implications for China, I mean, China’s recovery is at an advanced stage. It's been in an advanced stage for a while, but with recent developments, what we're seeing is that private consumption is still not coming back up as fast as one would expect it to, and there is weaknesses in the real estate sector. So, all of that is feeding into a downgrade for China. I would suspect that those factors, in terms of dealing with a pandemic, in terms of the real estate sector, would be bigger factors in our baseline for determining the part of growth in China. But of course, if there is overall a general global financial tightening, then all countries do get affected by it and so will China.

QUESTIONER: Thank you very much for taking my question. I wanted to ask about global trade. According to the latest update to the world, there is a 0.7 percentage points downgrade for global trade, and I was wondering what other factors for the downgrade and how much did it drag on global economy and what the suggestions to improve. Thank you.

MS. GOPINATH : Global trade, if you think about it, you know, is one where recovery was very strong after the collapse in 2020, so we've seen trade come back very strongly. It's also a reflection of the fact that global demand has shifted more towards goods, away from services, and that also helped trigger a lot of trade. In the third quarter of last year, you know, toward the end of it, there were problems in terms of disruptions, delta disruptions, but more supply chain disruptions that were affecting trade. But most recently we're seeing some of that get ironed out and we're seeing recoveries on trade. But I think looking forward, we should keep in mind that as things normalize and as demand starts pivoting back to services, away from goods, we should also see some reduction in this. We should expect to see some slowing in the growth in trade. So, I would say these are the combinations of factors.

QUESTIONER: Yes. I just wonder whether you can quantify how big a boost to the global economy there would be in the event that the IMF's vaccine targets were met, and how that would be portioned between the advanced world and developing countries, because the advanced world presumably has much to gain from developing countries and emerging countries being fully vaccinated. I just wonder whether you've done any number-crunching on how much that would add to your global growth forecast.

MS. GOPINATH : You know, without a doubt all these challenges that we're facing, many of them, not all, but many of the challenges that the world is facing is because we still remain in the grip of the pandemic. So, you know, most recent, the Omicron variant, the disruptions that it's creating in the first quarter of this year, is just a sign that we're not going to escape the pandemic durably without getting to, you know, widespread vaccinations, testing, diagnostics, everywhere in the world.

In terms of numbers, these are just, you know, the world is changing really rapidly, so there are -- it's hard to kind of make in real time what each of these different levers would add to growth. But for me, it's fairly simple. We have a pandemic that we are now estimating will cost the global economy $13.8 trillion by 2024. The IMF pandemic proposal was for $50 billion. We're now at a point where the residual grant financing gap is about $16 billion, and any simulation that we do of the benefits of reducing risks of much more scary variants showing up, the, you know, the reversal in recovery prospects that we are seeing in countries that are getting hit by the virus variant, I mean, all of that is in the trillions of dollars. So with comparing trillions to $16 billion in terms of grant financing at this point, I think it's pretty obvious that we should close that gap, because the benefits are tremendous.

MR. ANSPACH : Thanks very much, Gita. Before we close I wanted to turn the floor to Petya to conclude this press conference. Petya.

MS. KOEVA BROOKS : Thank you, Raphael. It's a bittersweet moment, because it's the last time that we are doing the press conference with Gita, and Gita, on behalf of all of us who have been working on the world economic outlook across departments, across The Fund, I would say it's been just a tremendous pleasure and privilege to work with you, and we're just also so glad that you're not going very far away, and so wanted to wish you the best of luck.

MS. GOPINATH : Thanks so much for saying that. Actually, I should be the one thanking everybody here. Malhar and Petya for the phenomenal work on the WEO that we get to do every quarter, and it's been great working with you, and I look forward now to being in the audience and watching the next round of this press conference.

MR. ANSPACH : Thanks very much, Gita.

MS. GOPINATH : Thank you, and Raphael, thank you so much.

MR. ANSPACH : Thank you, Gita. Thank you, Petya. Thank you, Malhar. Thank you for joining us, and stay tuned, and stay safe, and stay well. Thank you.

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