Vaccination campaigns, concerted health policies and government financial support are expected to lift global GDP by 4.2 percent in 2021 after a fall of 4.2 percent in 2020, but growth is expected to dip to 3.7 percent in 2022, the Organisation for Economic Cooperation and Development (OECD) said Wednesday.
In its latest global economic outlook report, the OECD noted that these expectations reflect a stronger recovery in 2021 in case would-be vaccines are rolled out fast, which is expected to boost confidence and lower economic uncertainty.
The report underscored that delays to vaccination deployment, difficulties controlling new virus outbreaks and failure to learn lessons from the first wave of the pandemic will likely weaken the global economic outlook.
Asian countries will witness a stronger bounce back, compared to other regions across the world, as they have brought the virus under control, according to the report.
Yet, even by the end of 2021, many economies will still fall below economic growth levels attained in 2019, before the outbreak, according to the report.
The OECD in its report said that a number of Covid-19 vaccines are expected to be widely available in 2021, which has raised hopes that recovery is in sight. “But the path remains long and difficult. Achieving a stronger, sustainable and inclusive global economy will require determined policy action now,” reads the report.
In this regard, governments should maintain exceptional fiscal support and ensure that the money reaches those who need it the most, through adopting a number of policies that aim to strengthen public health, protect the incomes of the low-skilled and the vulnerable, improve training schemes and access to the labour market, extend grants for small and medium-sized enterprises (SMEs) and alleviate their debt burdens while investing more in education.
In October, the International Monetary Fund (IMF) expected global economic growth to contract by -4.4 percent in the short term of 2020, a less severe contraction than was forecast in June when growth was projected to decline by -4.9 percent.
It also stressed that 2021 will witness a recovery from the pandemic, but the bounce back will be gradual and not easy.