Analysis: A Fiscal Tightrope: Comparing the COVID-19 Recovery of Advanced and Emerging Economies
By Gita Gopinath, Vitor Gaspar,
Differences in vaccine access and the ability to deploy policy support are creating a growing divergence between advanced economies from many emerging market and developing economies. Faced with high deficits and historic levels of debt, countries with limited access to financing are walking a fiscal tightrope between providing adequate support and preserving financial stability.
Without resolute measures to address this growing divide, COVID‑19 will continue to claim lives and destroy jobs, inflicting lasting damage to investment, productivity, and growth in the most vulnerable countries. The pandemic will further disrupt the lives of the most vulnerable, and countries will see a rise in extreme poverty and malnutrition, shattering all hope of attaining the Sustainable Development Goals.
Narrowing the pandemic divide thus requires collective action to boost access to vaccines, secure critical financing, and accelerate the transition to a greener, digital, and more inclusive world.
Photo courtesy of Chris Phutully.
Source: World Economic Forum (link opens in a new window)
- Coronavirus, Health Care