The International Monetary Fund called for China to speed up its coronavirus vaccine program, warning the slowing pace of new doses administered could undermine a recovery in consumer spending in the economy.
Helge Berger, head of the IMF's China mission, said in an interview that the current pace of providing three doses of Covid vaccine would take a matter of years. He said that an acceleration of the vaccination campaign would support confidence and ultimately consumption, with spending growth yet to recover to pre-pandemic rates, partly because households are cautious about Covid infections.
According to official data, 375 million people over the age of 15 in China still have not received three doses of a vaccine, while the daily vaccination rate has fallen below 800,000 per day. Three doses of China's domestic coronavirus vaccines were nearly as effective as mRNA vaccines in preventing severe infections or deaths, according to studies.
The low rate of full vaccination among elderly people is one of the reasons China is sticking to its strict Covid Zero policy that requires limits on activity wherever virus cases occur. According to China's national health commission, only about 64% of Chinese people over 60 have received three doses.
Berger said the lock downs in Shanghai and dozens of other cities since March are a key reason why the IMF sees downside risks to its April forecast of 4.4% gross domestic product growth for China this year.
He said that the second quarter will be weak as a result of the lockdowns.
Berger said that in Shanghai measures of economic activity monitored by the IMF have only recovered to around 50% of pre-lockdown levels, despite the fact that national data has returned to pre-lockdown levels.
Read more: Even Without a Lockdown, Beijing s Economy Struggled in May.
Economists surveyed by Bloomberg predict growth of 4.1% in China this year and a possible contraction in the quarter-on-quarter GDP in the April-June period. It is unlikely that the government will meet its full-year target of 5.5%.
The IMF has called for more fiscal support for households in Beijing. Even taking into account measures announced since April, China s fiscal stimulus this year is smaller than 2020, Berger said.
The known fiscal measures this year are still small relative to 2020, even though the shock in 2020 was larger than this year, he said.
There is no age of credibility for Central Banks that is over.