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IMF managing director Kristalina Georgieva. Image © Shutterstock

At a virtual session held as part of the World Economic Forum, normally held in-person at Davos, Kristalina Georgieva described 2022 as “like navigating an obstacle course” of risks, including inflation, renewed waves of virus infections and high debt levels.

The IMF has previously said the pandemic will cost the global economy $12.5trn in lost output by the end of 2024, but Georgieva hinted that the fund’s appraisal of the world economy has since shifted.

“On the good news side, we anticipate the recovery to continue, but it is losing some momentum and it is faced with the renewal of infections on top of them the persistent – much more persistent than anticipated – inflation, and on top of it record high debt levels,” she said.

Georgieva stressed that it is “not just for central bankers to fight” inflation, given the role other areas of policy have to play.

“If you look at the reasons for inflation, one is demand surging while supply falls behind, and another is supply interruptions primarily caused by Covid,” she said.

Georgieva also pointed to climate issues and geopolitical tensions, as well as tightening monetary policy, as affecting inflation.

She said the best way out of the pandemic is to “build our response capabilities everywhere”, referring to the “dangerous divergence” between vaccine rollouts in richer and poorer countries.

“We have 86 countries where the target of 40% vaccinations by the end of last year have not been met,” she said.

In sub-Saharan Africa just 7% of the population has been jabbed, while the equivalent figure for advanced economies is 70%, according to Georgieva.