Uneven rollout of vaccines across the world could threaten global financial stability, warns IMF
The International Monetary Fund (IMF) has warned that vaccine shortages could threaten global financial stability.
While developed countries like the UK have bought millions of doses, shortages in other parts of the world may threaten any economic recovery.
As the organisation, which fosters economic cooperation, released an update to its Global Financial Stability report, it urged governments to keep providing financial support and ‘contain rising vulnerabilities’ caused by unequal distribution of vaccines.
While developed countries like the UK have bought millions of doses of vaccines, shortages in other parts of the world may threaten any economic recovery
It said: ‘Delays in tackling the pandemic in [emerging market] countries may bode ill for the global economy.
Supply chain disruptions could affect corporate profitability even in regions where the pandemic is under control.
‘And because growth is a crucial ingredient for financial stability, an uneven and partial recovery risks jeopardising the health of the financial system.’
It added that ‘inequitable distribution of vaccines risks exacerbating financial vulnerabilities’.
Emerging markets have rallied by 7.6 per cent this year, according to an MSCI index tracking the sector, and are above pre-pandemic levels as investors risk putting in money to try to make a return.
Tobias Adrian, of the IMF’s capital markets division, said some traders may not have priced in the risk of ‘broader infections in a resurgence of the virus’, which could cause an economic shock.
Despite its worries, the IMF said the global financial system, as a whole, looked relatively healthy.