The OECD raised its 2021 global GDP growth forecast on Monday, but warned that “too many headwinds persist” as not enough Covid vaccines are reaching emerging economies and markets worry about inflation.
The world economy will expand by 5.8% this year, the highest since 1973 and up from a previous estimate of 5.6%, the Paris-based Organisation for Economic Co-operation and Development said in a report.
Most economies should return to their 2019, pre-pandemic levels next year, the OECD said. This follows a massive global recession last year that was caused by lockdowns and travel curbs imposed by governments to slow the spread of Covid-19.
Read more: GDP growth: the way forward
“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,” OECD chief Laurence Boone said in the report. The recovery is uneven so far, with the United States and China returning to pre-pandemic levels and forecast to have much stronger growth than other major economies such as Japan and Germany.
While the US and South Korea are back to their pre-pandemic income levels, it could take an additional year for much of Europe to catch up.
Published in The Express Tribune, June 1st, 2021.