By Andrea Shalal

WASHINGTON (Reuters] – Due to differences in revenue growth, vaccination rates and ability to borrow, economic growth in less developed countries is likely not to keep pace with pre-pandemic projections for several years. This was stated by the International Monetary Fund’s Fiscal Monitor Report, released Wednesday.

The report revealed that global debt rose to record levels of $226 trillion in 2020. This $27 trillion increase in one year is far greater than the $20 trillion cumulative gain over two years following the 2008/2009 financial crisis.

About 90% came from advanced and China economies. However, emerging and developing countries are far less able and vulnerable to potential interest rate rises and have far less access to financial markets.

“The great vaccine divide, climate change, and the great financing divide are global problems that demand global action,” he said, warning that low-income countries face compounding challenges that could slow growth prospects for years.

Gaspar stated that the pandemic has increased the already substantial financing gap faced by low-income countries prior to the crisis. He also said that the emerging and developing economies are more susceptible to global interest rate changes.

The report stated that this could lead to borrowing costs rising faster than they expected when central banks begin to withdraw monetary support from the pandemic.

The global government debt is now at an all-time high of $88 trillion. This represents just under 100% of GDP. Fiscal and economic developments vary widely depending on the level of pandemics, local vaccination rates and governments’ ability to borrow low-cost.

The report estimated that 65 to 75 million people would be in poverty by 2021, compared with the situation without the pandemic.