Yellen warns virus variants threaten economic recovery
VENICE — Treasury Secretary Janet Yellen said Sunday that she was concerned that coronavirus variants could derail the global economic recovery and called for an urgent push to deploy vaccines more rapidly around the world.
Her comments, made at the conclusion of a gathering of the finance ministers of the Group of 20 nations, came as the highly contagious delta variant of the coronavirus was driving outbreaks among unvaccinated populations in countries such as Australia, Indonesia, Malaysia and Portugal. Delta is also now the dominant variant in the United States.
“We are very concerned about the delta variant and other variants that could emerge and threaten recovery,” Yellen said. “We are a connected global economy. What happens in any part of the world affects all other countries.”
Many cities and countries have started to declare victory against the pandemic, easing restrictions and returning to normal life. But Yellen warned that the public health crisis was not over.
She said that the world’s top economic officials had spent much of the weekend in Venice discussing how they could improve vaccine distribution, with the goal of getting 70 percent of the world inoculated by next year. Yellen noted that many countries had been successful in financing the purchase of vaccines, but that the logistics of getting them into people’s arms were falling short.
“We need to do something more and to be more effective,” she said.
The spread of variants
has started to dampen optimism about the trajectory of the recovery.
Analysts at Capital Economics said last week that they planned to lower their economic growth outlook for the year to below 6 percent.
The spread of new coronavirus variants has “raised doubts about the pace of real economic growth in the second half of this year and beyond,” Paul Ashworth, the chief North America economist at Capital Economics, wrote in a research note.
The International Monetary Fund said it was maintaining its projection for 6 percent global growth this year, but it warned that growth was being suppressed in developing countries where infection rates were surging.
“The divergence across economies is intensifying,” Kristalina Georgieva, managing director of the IMF, said Saturday. “Essentially, the world is facing a twotrack recovery.”
Some finance ministers also expressed concern over the weekend that variants and slow vaccine uptake could upend the recovery. That concern was highlighted
as a downside risk to the global economy in the joint statement that the group released.
“The single hurdle on the way to a quick, solid economic rebound is the risk of having a new wave of pandemics,” said Bruno Le Maire, the French finance minister. “We all have to improve our vaccination performance.”
The IMF executive board approved a plan last week to issue $650 billion worth of reserve funds that countries could use to buy vaccines and finance health care initiatives.
Yellen said she had pressed her G-20 counterparts to accelerate “equitable” delivery and distribution of vaccines, diagnostics and therapeutics to ensure that low- and middle-income countries could fight flare-ups of the virus.
Policymakers at the meeting also spent time focusing on new investments to prepare for future pandemics. Yellen said that, while this was important, there was more that needed to be done in the near term.
“Certainly variants represent a threat to the entire globe,” she said.