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An annual report released Thursday by the International Monetary Fund projects that the U.S. economy will grow roughly 7% this year as federal stimulus programs fuel consumer spending — but that growth raises the risk of inflation. The report also urges the U.S. to help other countries cope with the pandemic. Kristalina Georgieva, managing director of the IMF, joins Judy Woodruff to discuss.
The fiscal and monetary policies implemented by the U.S. government in the past year, along with the falling numbers of new COVID cases, should pave the way for a robust U.S. economic recovery, although real challenges remain.
That was the general conclusion of an annual report released today by the International Monetary Fund. It projects that the U.S. economy will grow roughly 7 percent this year, as federal stimulus programs fuel consumer spending.
But that growth raises the risk of inflation. The report also emphasizes that the pandemic itself remains the greatest threat to any nation and urges the U.S. to help other countries cope with the health crisis.
Kristalina Georgieva is managing director of the International Monetary Fund and joins me now.
Director Georgieva, it's so good to have you with us again.
I want to ask you about those economic projections, but let's start with COVID and the effect it has had on the world. You and the IMF are calling this week for countries that can afford to do so to particularly help the countries on the African continent, sub-Saharan Africa, with more doses of the COVID vaccine.
Why is this important, and do you expect to get the help you need?
It is very important for everyone everywhere. Why? Because what we are facing in the world is a two-track vaccination path that leads to two-track economic recovery.
In the United States, vaccinations have exceeded 50 percent. In many other advanced economies, they are going up in the territory that allows the economies to fully reopen, whereas, in many developing countries, and especially in low-income countries, vaccination rates are extremely low.
In Africa, less than 1 percent of the adult population is fully vaccinated, and yet we see the new Delta variant causing a third, very rapidly going-up wave of infections in Africa.
The impact of this is twofold. One, it is holding the recovery of the world economy back and, of course, harming people tremendously. We calculate that, if we accelerate vaccinations, if we vaccinate the world to 40 percent this year, 60 percent by the middle of next year, we will gain $9 trillion in output between now and 2025.
And 40 percent of this gain will be for advanced economies because of this rapid recovery of the world. And, two, because, when we don't vaccinate people, we leave patches as fertile ground for new mutations that are ricocheting back in the developed world.
And what I want to ask, is the United States, as you know, has already pledged to give 500 million doses or more to, what, over 100 of the world's poorest countries. How much more are you asking the U.S. to do?
So far, we have gotten about a billion doses pledged to increase vaccinations in developing countries.
But we are still — we are still significantly short. We need 11 billion doses for the world. And we need, next year, to get to an excess production of vaccines, so we vaccinate those who need it, and we secure boosters if that becomes necessary.
So, to answer your question, U.S. is doing a very good job leading the world with offering additional vaccines, but we need more.
And it's a subject, I know, that so many people know is important and could pursue.
But I also want to talk to you about the economy and the bounce-back from the pandemic. As I reported a moment ago, you, the IMF today, projecting the U.S. economy will grow 7 percent, a remarkable rate of growth, this year.
What does that mean for the world? We know the entire global economy took a big hit from this pandemic. What does this — this improvement here in the United States going to mean for the whole world?
Let me first recognize the two foundations for this strong growth, the stimulus that was put in place to inject money in the hands of people and support businesses and the accelerated vaccination push that the U.S. has been pursuing over the last months.
They both lead to this remarkable recovery that will deliver the highest growth rate in the United States since 1984, a generation ago. What does it mean for the rest of the world? Primarily good news, because higher growth in the United States means that the United States is going to be demanding more goods from other nations and is, in that way, exporting some of this growth momentum.
This is why our message is very simple, vaccine policy this year, next year is economic policy. Let's vaccinate the whole world.
So, in a few words, Director Georgieva, what should Americans, what should the United States be doing in the year, the next year, a couple of years to come to see the world move forward in total, together, in a positive direction?
Well, first and foremost, the United States ought to continue to build its competitiveness and the vibrancy of its economy, because, as the largest economy in the world, when the U.S. does well, that is good for everybody.
And, in this sense, we very warmly welcome the two plans that are now under consideration, the Jobs and the Families plans. They are going to inject more productivity, higher labor market participation in the U.S. that would boost between 2022 and 2024 growth in U.S. by 5.25 percentage points.
And it will also take care of the people in the United States that have been hit the hardest by this pandemic. We mean Black and Hispanic communities. So, that action in U.S. is beneficial for the world directly and also indirectly, as a leadership as to how tax policy and spending policy can lead to a more vibrant and fair economy in the future.
A number of policies of this administration.
Kristalina Georgieva, the managing director of the International Monetary Fund, thank you very much.
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