OECD Revises Upwards Global Economic Growth Forecasts

The Organisation for Economic Co-operation and Development (OECD) has improved its expectations for the global economy this year, due to the rollout of the COVID-19 vaccine, which is helping in the fight against the Coronavirus pandemic.

Vaccines are allowing reopening economies and businesses to resume their work as usual, according to a recent report by OECD.

Now, the organization is expecting the global economy to grow by 5.8% in 2021 and by 4.4% in 2022, compared to previous growth estimates at 5.6% and 4.0%, respectively, as per the March outlook report.

Recovery in many countries is believed to have progressed faster than expected, helping the global economy restoring its pre-pandemic activity levels.

Recent data by the International Monetary Fund (IMF) showed that developed economies are recovering from the pandemic at a better pace than previously estimated

The unprecedented high levels of public expenditure to combat the coronavirus pandemic is pushing the global economy towards a strong recovery.

The IMF expects the global economy will grow by 6% in 2021, achieving the best growth rate since 1976, as it revised its growth forecast higher from 5.5%.

Due to the recently approved $1.9 trillion stimulus package in the United States, the IMF expects the U.S. economy will grow by 6.4%, which will be its best growth rate since 1984.

In addition, the world’s economy has contracted by 3.3% in 2020, a decline that came better than previously expected at 3.5%, according to the international institution.

Developed economies are expected to register a growth of 5.1%, compared with previous estimates of 4.3%.

However, restoring pre-pandemic growth rates is a target that is yet to be reached amid the continuity of pandemic-related risks.

The Chief Economist of the OECD, Laurence Boone, believes that the risk that sufficient post-pandemic growth is not achieved or widely shared is elevated.