As the world economy struggles to find its footing, the resurgence of the coronavirus and supply chain chokeholds threaten to hold back the global recovery’s momentum, a closely watched report warned on Tuesday.
The overall growth rate will remain near 6 percent this year, a historically high level after a recession, but the expansion reflects a vast divergence in the fortunes of rich and poor countries, the International Monetary Fund said in its latest World Economic Outlook report.
Worldwide poverty, hunger and unmanageable debt are all on the upswing. Employment has fallen, especially for women, reversing many of the gains they made in recent years.
Uneven access to vaccines and health care is at the heart of the economic disparities. While booster shots are becoming available in some wealthier nations, a staggering 96 percent of people in low-income countries are still unvaccinated.
restrictions and bottlenecks at key ports around the world have caused crippling supply shortages. A lack of workers in many industries is contributing to the clogs. The U.S. Labor Department reported Tuesday that a record 4.3 million workers quit their jobs in August — to take or seek new jobs, or to leave the work force.
Germany, manufacturing output has taken a hit because key commodities are hard to find. And lockdown measures over the summer have dampened growth in Japan.
Fear of rising inflation — even if likely to be temporary — is growing. Prices are climbing for food, medicine and oil as well as for cars and trucks. Inflation worries could also limit governments’ ability to stimulate the economy if a slowdown worsens. As it is, the unusual infusion of public support in the United States and Europe is winding down.
6 percent projected in July. For 2022, the estimate is 4.9 percent.
The key to understanding the global economy is that recoveries in different countries are out of sync, said Gregory Daco, chief U.S. economist at Oxford Economics. “Each and every economy is suffering or benefiting from its own idiosyncratic factors,” he said.
For countries like China, Vietnam and South Korea, whose economies have large manufacturing sectors, “inflation hits them where it hurts the most,” Mr. Daco said, raising costs of raw materials that reverberate through the production process.
The pandemic has underscored how economic success or failure in one country can ripple throughout the world. Floods in Shanxi, China’s mining region, and monsoons in India’s coal-producing states contribute to rising energy prices. A Covid outbreak in Ho Chi Minh City that shuts factories means shop owners in Hoboken won’t have shoes and sweaters to sell.
worldwide surge in energy prices threatens to impose more hardship as it hampers the recovery. This week, oil prices hit a seven-year high in the United States. With winter approaching, Europeans are worried that heating costs will soar when temperatures drop. In other spots, the shortages have cut even deeper, causing blackouts in some places that paralyzed transport, closed factories and threatened food supplies.
China, electricity is being rationed in many provinces and many companies are operating at less than half of their capacity, contributing to an already significant slowdown in growth. India’s coal reserves have dropped to dangerously low levels.
And over the weekend, Lebanon’s six million residents were left without any power for more than 24 hours after fuel shortages shut down the nation’s power plants. The outage is just the latest in a series of disasters there. Its economic and financial crisis has been one of the world’s worst in 150 years.
Oil producers in the Middle East and elsewhere are lately benefiting from the jump in prices. But many nations in the region and North Africa are still trying to resuscitate their pandemic-battered economies. According to newly updated reports from the World Bank, 13 of the 16 countries in that region will have lower standards of living this year than they did before the pandemic, in large part because of “underfinanced, imbalanced and ill-prepared health systems.”
Other countries were so overburdened by debt even before the pandemic that governments were forced to limit spending on health care to repay foreign lenders.
In Latin America and the Caribbean, there are fears of a second lost decade of growth like the one experienced after 2010. In South Africa, over one-third of the population is out of work.
And in East Asia and the Pacific, a World Bank update warned that “Covid-19 threatens to create a combination of slow growth and increasing inequality for the first time this century.” Businesses in Indonesia, Mongolia and the Philippines lost on average 40 percent or more of their typical monthly sales. Thailand and many Pacific island economies are expected to have less output in 2023 than they did before the pandemic.
debt ceiling — can further set back the recovery, the I.M.F. warned.
But the biggest risk is the emergence of a more infectious and deadlier coronavirus variant.
Ms. Gopinath at the I.M.F. urged vaccine manufacturers to support the expansion of vaccine production in developing countries.
Earlier this year, the I.M.F. approved $650 billion worth of emergency currency reserves that have been distributed to countries around the world. In this latest report, it again called on wealthy countries to help ensure that these funds are used to benefit poor countries that have been struggling the most with the fallout of the virus.
“We’re witnessing what I call tragic reversals in development across many dimensions,” said David Malpass, the president of the World Bank. “Progress in reducing extreme poverty has been set back by years — for some, by a decade.”
The reason for the surge in Mongolia, Mr. Batbayar said, is that the country reopened too quickly, and many people believed they were protected after only one dose.
“I think you could say Mongolians celebrated too early,” he said. “My advice is the celebrations should start after the full vaccinations, so this is the lesson learned. There was too much confidence.”
Some health officials and scientists are less confident.
Nikolai Petrovsky, a professor at the College of Medicine and Public Health at Flinders University in Australia, said that with all of the evidence, it would be reasonable to assume the Sinopharm vaccine had minimal effect on curbing transmission. A major risk with the Chinese inoculation is that vaccinated people may have few or no symptoms and still spread the virus to others, he said.
“I think that this complexity has been lost on most decision makers around the world.”
In Indonesia, where a new variant is spreading, more than 350 doctors and health care workers recently came down with Covid-19 despite being fully vaccinated with Sinovac, according to the risk mitigation team of the Indonesian Medical Association. Across the country, 61 doctors died between February and June 7. Ten of them had taken the Chinese-made vaccine, the association said.
The numbers were enough to make Kenneth Mak, Singapore’s director of medical services, question the use of Sinovac. “It’s not a problem associated with Pfizer,” Mr. Mak said at a news conference on Friday. “This is actually a problem associated with the Sinovac vaccine.”
Bahrain and the United Arab Emirates were the first two countries to approve the Sinopharm shot, even before late-stage clinical trial data was released. Since then, there have been extensive reports of vaccinated people falling ill in both countries. In a statement, the Bahraini government’s media office said the kingdom’s vaccine rollout had been “efficient and successful to date.”
Still, last month officials from Bahrain and the United Arab Emirates announced that they would offer a third booster shot. The choices: Pfizer or more Sinopharm.
Reporting was contributed by Khaliun Bayartsogt, Andrea Kannapell, Ben Hubbard, Asmaa al-Omar and Muktita Suhartono. Elsie Chen and Claire Fu contributed research.
I want to end this week by showing you two Covid-19 charts. They contain the same message: The pandemic is in retreat.
received at least one vaccine shot, and the share is growing by about two percentage points per week. Among unvaccinated people, a substantial number have already had Covid and therefore have some natural immunity. “The virus is running out of places to be communicable,” Andy Slavitt, one of President Biden’s top Covid advisers, told me.
noted. For the first time since March 5 of last year, San Francisco General Hospital yesterday had no Covid patients — “a truly momentous day,” Dr. Vivek Jain said.
There are still important caveats. Covid remains especially dangerous in communities with low vaccination rates, as Slavitt noted, including much of the Southeast; these communities may suffer through future outbreaks. And about 600 Americans continue to die from the disease every day.
But the sharp decline in cases over the past month virtually guarantees that deaths will fall over the next month. The pandemic appears to be in an exponential-decay phase, as this helpful Times essay by Zoë McLaren explains. “Every case of Covid-19 that is prevented cuts off transmission chains, which prevents many more cases down the line,” she writes.
This isn’t merely a theoretical prediction. In Britain, one of the few countries to have given a shot to a greater share of the population than the U.S., deaths are down more than 99 percent from their peak.
down 23 percent from their peak in late April. In India, caseloads have been falling rapidly for almost two weeks.
The rising number of vaccinations also helps; it has exceeded 1.5 billion, which means that more than 10 percent of the world’s population — and maybe closer to 15 percent — has received at least one shot. (A new outlier: Mongolia has secured enough shots to vaccinate all of its adults, thanks to deals with neighboring Russia and China.) Natural immunity, from past infections, may also be slowing the spread in many places, and the virus’s seasonal cycles may play a role, too.
Most countries remain more vulnerable than the U.S. because of their lower vaccination rates. In Africa, a tiny share of people have received a shot, and the numbers are only modestly higher in much of Latin America, the Middle East and Southeast Asia.
The vaccines are how this pandemic ends. That point is coming nearer in the United States and a few other affluent countries, but it remains distant in much of the world. Accelerating the global manufacturing and distribution of vaccines is the only sure way to avoid many more preventable deaths this year. (The Times editorial board, The Economist and National Review have each recently laid out arguments for how to do so.)
“Unless vaccine supplies reach poorer countries, the tragic scenes now unfolding in India risk being repeated elsewhere,” The Economist’s editors wrote. “Millions more will die.”
More on the virus:
Some Americans are struggling to make sense of — and pay — exorbitant and confusing bills, The Times’s Sarah Kliff reports.
A data idea, from Matthew Springer of the University of California, San Francisco: States should report Covid deaths and hospitalizations by vaccination status to highlight the value of the shots.
Virus resources: Look up the pace of vaccinations in your state.
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disqualified Belarus over lyrics that seemed to endorse a crackdown on antigovernment protests. In 2009, Georgia withdrew over a song about Vladimir Putin.
The Netherlands, which won the contest in 2019, is hosting the event tomorrow in an arena that will allow 3,500 audience members. Many of this year’s contestants qualified for Eurovision last year, though the show was canceled. While they’re getting another chance at performing this year, they’re singing different songs than they had planned in 2020.
The Guardian has a roundup of this year’s entries, including Ukrainian folk-techno and an Azerbaijani ode to a wartime spy. — Claire Moses, a Morning writer
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At a time when most countries are scrambling for coronavirus vaccines, Mongolia already has enough to fully vaccinate more than half its citizens, in large part thanks to deals with both China and Russia.
Officials are so confident about the nation’s vaccine riches that they are promising citizens a “Covid-free summer.”
Mongolia’s success in procuring so many doses within months is a big victory for a low-income, developing nation. Many poor countries have been waiting in line for shots, hoping for the best. But Mongolia, using its status as a small geopolitical player between Russia and China, was able to snap up doses at a clip similar to that of much wealthier countries.
Mongolia has a population not much bigger than Chicago’s. The small democratic nation is used to living in the shadows of Russia and China, which often treat it as a geopolitical pawn.
during a pandemic, being a small nation sandwiched between two vaccine makers with global ambitions can have advantages.
“It speaks to the Mongolian ability to play to the two great powers and maximize their benefits even while they are on this tightrope between these two countries,” said Theresa Fallon, director of the Center for Russia Europe Asia Studies in Brussels.
It is also a win for China and Russia, which have extensive resource interests in Mongolia and ambitions to appear to play a role in ending the pandemic, even when much of the world has expressed deep skepticism over their homegrown vaccines.
has extended the period of time the Pfizer-BionNTech vaccine can be refrigerated. The agency now says undiluted and thawed vaccines can be stored for up to 30 days, rather than up to five, as before. The European Medicines Agency announced a similar recommendation earlier in the week.
Prince William, the second in line to the throne of Britain, said on Thursday that he had received his first dose of a Covid-19 vaccine. He shared a photo on social media of the injection at the Science Museum in London on Tuesday, thanking everyone involved in the country’s vaccination program. The prince is 38, part of an age group that became eligible to book inoculations last week. Queen Elizabeth II, his grandmother, was vaccinated in January and his father, Prince Charles, received a first dose in February.
The European Commission, the executive arm of the European Union, signed a contract for an additional 1.8 billion doses of BioNTech-Pfizer vaccine to be delivered between December 2021 and 2023, the commission’s president, Ursula von der Leyen, announced Thursday. The deal will allow member countries to buy 900 million doses, including booster shots to prolong immunity, as well as possible new vaccines targeting emerging variants of the coronavirus, with an option to purchase additional 900 million in coming years.
Anna Schaverien, Monika Pronczuk and Kaly Soto contributed reporting.
Mongolia, a country of grassy hills, vast deserts and endless skies, has a population not much bigger than Chicago’s. The small democratic nation is used to living in the shadow of its powerful neighbors, Russia and China.
But during a pandemic, being a small nation sandwiched between two vaccine makers with global ambitions can have advantages.
At a time when most countries are scrambling for coronavirus vaccines, Mongolia now has enough to fully vaccinate its entire adult population, in large part thanks to deals with both China and Russia. Officials are so confident about the nation’s vaccine riches that they are promising citizens a “Covid-free summer.”
Mongolia’s success in procuring the vaccines in the span of a few months is a big victory for a low-income, developing nation. Many poor countries have been waiting in line for shots, hoping for the best. But Mongolia, using its status as a small geopolitical player between Russia and China, was able to snap up doses at a clip similar to that of much wealthier countries.
deep skepticism over their homegrown vaccines.
Mongolia is a buffer between eastern Russia, which is resource rich and mostly unpopulated, and China, which is crowded and hungry for resources. While Russia and China are often aligned on the global stage, they have a history of conflict and are wary of each others’ interests in Mongolia. Those suspicions can be seen in their vaccine diplomacy.
arrived this week. Mongolia’s most recent agreement with China’s Sinopharm Group, which is state-owned, was made days before the company received emergency authorization from the World Health Organization.
Mongolia was late to the global clamber for Covid-19 vaccines. For nearly a year officials boasted that there were no local cases. Then came an outbreak in November. Two months later, political crisis precipitated by the mishandling of the virus led to the sudden resignation of the prime minister. The prospect of continued coronavirus restrictions threatened to throw the country into further political turmoil.
The new prime minister, Oyun-Erdene Luvsannamsrai, pledged to restart the economy, which had suffered from lockdowns and border closures, particularly in the south, where Mongolian truck drivers ferry coal across the border to China’s steel mills. But these plans were complicated by surging cases, with the daily count going from hundreds a day to thousands.
“We were quite desperate,” said Bolormaa Enkhbat, an economic and development policy adviser to Mr. Luvsannamsrai.
Vero Cell vaccine. Soon after, China donated 300,000 doses of its Sinopharm vaccine to Mongolia, citing a “profound traditional friendship” as motivation.
Opening up more of the border between China and Mongolia was also a part of the vaccine discussions, Chinese and Mongolian officials said in Chinese state media. Mongolia needs China to buy its coal — exports to the country make up nearly a quarter of Mongolia’s annual economic growth. The revenues helped to pad Mongolia’s budget by a quarter last year.
After a month of back and forth, the Mongolian government struck a deal in March with Russia’s Gamaleya Research Institute, too, for one million doses of the Sputnik vaccine. Days later, Mongolia finalized an agreement to buy 330,000 additional doses of the Sinopharm vaccine.
Ulaanbaatar, Mongolia’s capital, 97 percent of the adult population has received a first dose and more than half are fully vaccinated, according to government statistics. Across the country, more than three quarters of Mongolians have already received one shot.
China has shut its border and stopped purchasing Mongolian coal.
Mongolians have also expressed a preference for Russia’s Sputnik vaccine. To get the population to take the Sinopharm shot, the government has offered each citizen 50,000 tugriks — about $18 — to get fully vaccinated. The average monthly salary in 2020 was $460.
The terms and pricing of the Sinopharm and Sputnik deals were not made public, and Mongolia’s foreign ministry declined to comment on pricing. Representatives for the Gamaleya Research Institute and Sinopharm did not respond to requests for comment.
While some global health experts have questioned whether Sinopharm will be able to continue to deliver on its commitments overseas, it has delivered all of the doses Mongolia ordered. China has said it can make as many as five billion doses by the end of the year, though officials have warned that the country is struggling to make enough shots for its citizens.
a third booster shot sooner than expected.
China, for its part, may be playing a long game, said Julian Dierkes, an associate professor at the University of British Columbia who specializes in Mongolian politics. Though many Mongolians may still not trust China, the Mongolian government will remember how it made its vaccines available at a critical moment.
“We could coin a phrase here: ‘The opportunity of smallness,’” he said.