The Paris-based Organization for Economic Cooperation and Development (OECD) recently announced that the global economy is recovering from the Covid-19 pandemic, according to the media. The OECD revised its 2021 global growth forecast to 5.8 percent from 5.6 percent and warned of gaping differences. This means, the living standards of some people will not return to the pre-crisis levels for an extended period.
The report stated that it would take more than three years to elapse between the onset of the pandemic and recovery of per-capita economic output in countries like Argentina and Spain. Laurence Boone, Chief Economist at OECD, addressed the media and said, “It is with some relief that we can see the economic outlook brightening, but with some discomfort that it is doing so in a very uneven way. The risk that sufficient post-pandemic growth is not achieved or widely shared is elevated.”
The OECD complimented the governments for the swift and effective policy support that now fuels a rebound in trade, manufacturing and consumer spending. The assessment also sounds like a note of caution as confidence in the rich countries worldwide surges by lifting lockdown restrictions and accelerated vaccination rollout campaigns. It also warned about fortune diverging that could worsen because of a failure to get enough vaccines and support to the emerging and low-income economies. Those economies already have less capacity to absorb shocks and face sovereign funding issues.
The OECD added that the US would lead the global growth with a strong upturn where GDP is forecast to reach 6.9 percent in 2021 before easing to 3.6 percent in 2022. While in the UK, the GDP is expected to return to the pre-pandemic level by 2022. Increased border costs flowing from Brexit can hit foreign trade, according to the report.