Do not skimp on vaccinations, advises the IMF
Do not skimp on vaccinations, advises the IMF. According to the IMF, if the coronavirus can be brought under control sooner thanks to faster vaccination, advanced economies could collect more than a trillion dollars in taxes by 2025. Global gross domestic product (GDP) could then increase by about $ 9 trillion over this period thanks to faster business reopening and job creation.
“Vaccination will bring in more money than it will cost, which means a great return on public funds invested in strengthening the global production and distribution of vaccines,” the IMF said.
The fund estimates that governments spent about $ 16 trillion on pandemic-related stimulus measures within their budgets from the start of the pandemic until mid-March. The average budget deficit in developed countries rose to 11.7 percent of GDP last year from 2.9 percent a year earlier. According to the IMF, it should fall to 10.4 percent this year.
The fund also predicted that public debt in advanced economies would rise to 122.5 percent of GDP this year from 120.1 percent last year. Globally, it should then increase to a record 99 percent of GDP from last year’s 97 percent.
In Wednesday’s report, the IMF called for more targeted support for vulnerable households and small businesses. At the same time, however, IMF noted that some developed countries with high indebtedness should start working on renewing the budgetary space to address future shocks. According to the fund, these countries should prepare longer-term mechanisms to increase revenues and rationalize expenditures. Priority should be given to investing in combating climate change and reducing economic inequality.
The Monetary Fund said last week that advanced economies could use more progressive income taxation, property taxes, inheritance and gift taxes, and taxes on “excessive” corporate profits to reduce inequalities that have deepened as a result of the covid-19 pandemic.