It’s ‘a killer of people and jobs’

The World Health Organization on Thursday warned the unequal distribution of vaccines around the globe has contributed to the emergence of new variants, such as omicron, that threaten the global economic recovery.

“Vaccine inequity is a killer of people and jobs, and it undermines a global economic recovery,” WHO Director-General Tedros Adhanom Ghebreyesus said during a Covid update from the group’s headquarters in Geneva.

Tedros said the inability of world leaders to work together to increase vaccine coverage in poorer nations with less developed health systems was one of the biggest failures of 2021. Low vaccine coverage in many countries was a major factor in the emergence of variants such as delta and omicron, Tedros said. Delta was first detected in India in late 2020 while omicron was first found by health officials in southern Africa in November.

The WHO had set a target to vaccinate 40% of the population in every nation of the world by the end of 2021. However, 92 countries did not achieve that target despite the distribution of 9 billion shots worldwide, according to the WHO.

The WHO has set a goal to vaccinate 70% of the population in every country of the world by the middle of this year.

“Global leaders who have shown such resolve in protecting their own populations will extend that resolve to make sure that the world the whole world is safe and protected,” Tedros said. “And this pandemic will not end until we do that.”

The International Monetary Fund is expected to downgrade its global growth forecast due to the emergence of the omicron variant. The IMF has delayed the release of its World Economic Outlook until the end of January in order to take the impact of omicron into account.

“A new variant that may spread very rapidly can dent confidence, and in that sense, we are likely to see some downgrades of our October projections for global growth,” IMF Managing Director Kristalina Georgieva told Reuters during a virtual conference last month.

The IMF in October forecast that the global economy would grow 5.9% in 2021 and 4.9% in 2022. The organization warned at the time the emergence of new variants had created increased uncertainty.

The IMF projected that the pandemic could reduce gross domestic product worldwide by $5.3 trillion over the next five years compared with current projections. It called on world leaders to do more to increase vaccine coverage in low-income nations.

Federal Reserve Chairman Jerome Powell said last month that omicron poses a risk to U.S. economic growth, but he noted that there are many unknowns about how the variant will impact public health and the economy.

Powell said omicron’s impact will depend on how much it suppresses demand. The Fed chair said it was unclear how the variant would impact inflation, hiring and economic growth.

“The more people who get vaccinated the less economic effect,” Powell said during a press conference after the Fed’s December meeting. “It doesn’t mean it won’t have an economic effect,” he said.

Powell said the delta variant slowed hiring and hurt global supply chains during a wave of infection in the fall.

The Bank of England’s chief economist, Huw Pill, told CNBC last month that omicron poses a “two-sided” risk.

“Omicron has introduced a new level of uncertainty into our assessment of the economy as a whole, the inflation outlook and the labor market developments,” Pill told CNBC’s “Street Signs Europe.”