Global economy to rebound from pandemic next year, but poorest countries left behind, OECD forecasts Business News

Most rich countries will see their economies return to pre-pandemic levels next year, but progress is likely to be uneven and some countries risk being left behind, the Organization for Economic Co-operation and Development said ( OECD).

The Paris-based Rich Country Club said immunization advances in many advanced economies would mean global growth would be stronger than previously thought. He said growth was being driven by a “rebound in consumption, especially in services”.

Gross domestic product (GDP) – a measure of total goods and services produced – will grow 5.8 percent this year, according to the OECD forecast in its latest economic update. In December, he had predicted growth of 4.2 percent.

The recovery has been spurred in part by the ambitious spending plans of US President Joe Biden, which will allow the US economy to grow faster than expected even before the pandemic, the OECD said.

Despite the more optimistic outlook, global GDP is still expected to be £ 3 trillion lower next year than it would have been without the Covid pandemic.

The UK economy is expected to grow 7.2% this year and 5.5% in 2022, driven by the successful rollout of vaccination and the easing of lockdown restrictions.

However, the OECD predicts that the UK’s long-term economic growth will be affected by the pandemic. He predicts that the UK could face a larger drop in future potential growth within the G7 group of countries.

The organization said the recovery will be uneven, with countries that have successfully vaccinated their populations rebounding faster.

While Korea and the United States have already returned to their pre-pandemic income levels, much of Europe is expected to take another year to recover. Korea has kept the number of cases low thanks to an effective system of Covid-19 case tracking and outbreak control.

Less wealthy countries that have not been able to rapidly vaccinate populations, including Mexico and South Africa, could take three to five years to recover, the OECD has warned.

“As long as a large portion of the world’s population is unvaccinated and the risk of further epidemics remains, the recovery will be uneven and remain vulnerable to further setbacks,” the report said.

“Some targeted restrictions on mobility and activity may still need to be maintained, especially for cross-border travel. This will affect the prospects for full recovery in all countries, even for those with rapid vaccine deployment or low infection rates. “

He added: “Keeping up with the pace of vaccinations and responding to emerging viral mutations are major challenges for the future.”

Chief economist Laurence Boone said the latest OECD projections could give people in countries hard hit by the pandemic ‘hope’, who may soon be able to return to work and start living again. normally.

She added: “But we are at a critical stage in the recovery.

“The production and distribution of vaccines must accelerate globally and be supported by effective public health strategies.

“Stronger international cooperation is needed to provide low-income countries with the resources – medical and financial – needed to immunize their populations.

“The trade in health products must be able to flow without restrictions.”

Responding to the outlook, Chancellor Rishi Sunak said: “The strength of the UK growth forecast is a testament to the continued success of our vaccine rollout and proves that our jobs plan is working.

“It is great to see some early signs that the UK is recovering from the pandemic, but with debt at almost 100% of GDP, we also need to make sure that public finances remain on sound footing.

“That is why, in the March budget, I set out the steps we will take to contain debt over the medium term, ensuring that our future recovery is sustainable.