The IMF urged China to accelerate its COVID-19 vaccination program, warning that the sharply slowing pace of new doses administered could undermine a recovery in domestic consumer spending.
At the current pace, providing three doses of COVID-19 vaccines to the population would take a “matter of years,” Helge Berger, head of the IMF’s China mission, said in an interview.
With spending growth yet to recover to pre-pandemic rates, partly because households are cautious about COVID-19 infections, “an acceleration of the vaccination campaign would support confidence and ultimately consumption,” he said.
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About 375 million people over the age of 15 in China have yet to receive three doses of a vaccine, while the daily vaccination rate has fallen below 800,000 per day, official data show.
Studies have shown that three doses of China’s domestic COVID-19 vaccines were nearly as effective as mRNA vaccines in preventing severe infections or deaths.
The low rate of full vaccination, particularly among elderly people, is one of the reasons China is persisting with its strict “zero COVID” policy requiring limits on activity wherever virus cases occur.
Only about 64 percent of Chinese people over 60 have received three doses, the Chinese National Health Commission said.
Berger said the lockdowns in Shanghai and dozens of other cities since March are a key reason the IMF sees “downside risks” to its April forecast of 4.4 percent GDP growth for China this year.
“The second quarter will be weak given the lockdowns,” he said.
While national data have largely returned to pre-lockdown levels, Berger added that in Shanghai, measures of economic activity monitored by the IMF have recovered only to about 50 percent.
Economists surveyed by Bloomberg predict growth of 4.1 percent in China this year and a possible contraction in quarter-on-quarter GDP in the April-June period. That makes it unlikely the government would meet its full-year target of about 5.5 percent.
The IMF has consistently called on Beijing to increase fiscal support to households. Even taking into account measures announced since April, China’s fiscal stimulus this year is smaller relative to 2020, Berger added.
“The known fiscal measures this year are still small relative to 2020, even taking into account that in 2020 the overall shock was larger than this year,” he said.
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