OECD raises global growth forecast sharply, citing vaccines

A vaccination site in New York on May 12, 2021. (Photo: NYTimes)
A vaccination site in New York on May 12, 2021. (Photo: NYTimes)
The global economy is expected to recover from the coronavirus pandemic faster than expected this year, as vaccinations in advanced economies and an enormous fiscal stimulus package in the United States unleash pent-up business activity and job creation, the Organization for Economic Cooperation and Development said on Monday.اضافة اعلان

But the pace of the recovery still hinges on vaccination programs and the ability of governments to beat back new variants of the virus, raising fresh risks even as economic activity starts to rev back up in most parts of the world, the organization said in its latest economic outlook.

The organization sharply raised its forecast for global growth to 5.8 percent in 2021, up from a 4.2 percent projection in December. It said the pace of expansion would cool to 4.5 percent in 2022 as government support programs unwind.

A government stimulus-led upturn in the United States, where President Joe Biden is betting on a $2 trillion infrastructure package to end the effects of the pandemic faster, has helped improve the global outlook, the group said. China continues to experience the world’s strongest rebound, also lifting the global outlook.

In Europe, which has been lagging the United States in a recovery, an acceleration of vaccination programs has allowed governments to begin lifting restrictions on activities, speeding up what had been a slow economic reopening.

The opposite is true for many emerging-market economies that are suffering from slow distribution of vaccines, new outbreaks of COVID-19 and economically limiting containment measures, dampening prospects for a quick recovery.

India, which has suffered a deadly resurgence of the virus, is likely to face economic struggles as a result and a slower return to pre-pandemic growth levels until the impact of the virus fades, the organization said.

It estimated the US economy would grow 6.9 percent in 2021; in China, 8.5 percent; in the euro area, 4.3 percent; in Britain, 7.2 percent; in Argentina, 6.1 percent; and in India, 9.9 percent.

“Our latest projections provide hope that in many countries, people hit hard by the pandemic may soon be able to return to work and start living a normal life again,” Laurence Boone, the organization’s chief economist, said during a news briefing.

“But we are at a critical stage of the recovery. Vaccination production and distribution have to accelerate globally and be backed by effective public health strategies,” she said.

Read more Business