“The emergence of virus variants has increased uncertainty and risks to the recovery are tilted to the downside,” IMF said in a communique after the conclusion of its annual meeting, attended among others by Union Finance Minister Nirmala Sitharaman.

“The crisis is exacerbating poverty and inequalities, while climate change and other shared challenges are becoming more pressing and require our urgent attention,” it added.

Strong international cooperation and immediate action are needed to expedite universal vaccination to stem the spread of the pandemic, limit divergences, and support an inclusive recovery everywhere, it said in the communique.

The IMF also promised to take steps to boost the supply of vaccines, essential medical products and inputs to developing countries and remove relevant supply and financing constraints to help them reach the global goals of vaccinating at least 40 per cent of the population in all countries by the end of 2021 and 70 per cent by mid-2022.

Addressing a press conference later, Magdalena Andersson, Minister for Finance of Sweden who chaired the meeting said the pandemic has worsened poverty and inequalities globally.

The meeting called for strong international cooperation and immediate action to achieve universal vaccination, she said.

“Meanwhile, climate change is becoming more pressing and it requires our urgent attention. We made a strong commitment to further accelerate the climate action in line with the Paris Agreement,” Andersson.

“Here, we will use all effective tools as fit to country-specific circumstances. We will work together to help build a more resilient and sustainable global economy,” she said.

There is an even stronger sense of urgency when it comes to climate change, she said in response to a question.

The communique noted that they look forward to the outcomes of COP26 and commit strongly to further accelerate climate action in line with the Paris Agreement, taking into account country-specific factors.

“In this context, we will utilize policy mixes based on all effective tools, ranging from the fiscal, market, and regulatory actions, including efficient policy instruments, to reduce greenhouse gas emissions while protecting the most vulnerable,” the IMF said.

“We will also collaborate to unlock the potential of the digital economy aiming at benefits reaching all countries while managing associated risks,” it said.

“We will implement a more robust international tax architecture,” it said as the global financial leaders reaffirmed their commitments on exchange rates, excessive global imbalances and governance, and their statement on the rules-based trading system, as made in April 2021.

IMF Managing Director Kristalina Georgieva told reporters that without the coordinated global response of policymakers, the world would not be on the path to recovery.

“And this is the spirit we now need more than ever before to confront multiple challenges ahead, from inflation to debt to economic divergence and the criticality at the same time when we wrestle with short-term challenges to strive to build a more resilient, more sustainable world economy that benefits all,” she said.