Global GDP growth is projected to be 5.6 percent in 2021 and 4 percent in 2022, according to the published preliminary report of the Organization for Economic Cooperation and Development (OECD) on the prospects for the economies of the G20 and other countries, Report informs.
The OECD document is entitled ‘Strengthening the recovery: The need for speed.’
The experts of the organization noted that the forecast for global GDP for 2021 exceeds the December estimate of the OECD by 1.4 percent, and for 2022 - by 0.3 percent.
By mid-2021, global GDP should be above the pre-pandemic level, although this will not happen in all countries, the forecast says.
Global economic prospects have improved markedly in recent months, helped by the gradual deployment of effective vaccines, announcements of additional fiscal support in some countries, and signs that economies are coping better with measures to suppress the virus, according to the report. Despite the improved global outlook, output and incomes in many countries will remain below the level expected prior to the pandemic at the end of 2022.
The significant fiscal stimulus in the United States, along with faster vaccination, could boost US GDP growth by over 3 percentage points this year, with welcome demand spillovers in key trading partners, experts say.
Sizeable risks remain. Faster progress in vaccine deployment in all countries would enable restrictions to be lifted more quickly and enhance confidence and spending. Slow progress in vaccine rollout and the emergence of new virus mutations resistant to existing vaccines would result in a weaker recovery, larger job losses and more business failures, the report says.
There are increasing signs of divergence across countries and sectors. Strict containment measures will hold back growth in some countries and service sectors in the near term, while others will benefit from effective public health policies, faster vaccine deployment and strong policy support.
International policy co-ordination is essential to increase the gains from national policy actions to tackle the pandemic, enhance resilience and ensure a strong and inclusive recovery, the OECD said. Experts noted that fiscal policy support should be contingent on the state of the economy and the pace of vaccinations, with new policy measures implemented promptly and fully if required. A premature tightening of fiscal policy must be avoided.
According to the OECD forecast, in 2021, the GDP of the G20 countries will grow by 6.2 percent against 4.7 percent of the previous forecast, and in 2022 it will amount to 4.1 percent (previously 3.7 percent). At the end of 2020, the GDP of the G20 countries fell by 3.2 percent.
The euro area countries are expected to have economic growth at the level of 3.9 percent against 3.6 percent of the previous forecast, in 2022 the GDP growth rate is projected at 3.8 percent (previously 3.3 percent).
The indicators of the main EU countries are expected to be positive. Germany’s GDP growth will be 3 percent in 2021 and 3.7 percent in 2022, France’s GDP is projected at 5.9 percent and 3.8 percent, and Italy’s GDP - 4.1 percent and 4 percent.
Spain will achieve 5.7 percent GDP growth in 2021 and 4.8 percent growth in 2022. The GDP growth of the UK, which left the EU, may be 5.1 percent this year and 4.7 percent in 2022.
According to the OECD forecast, the growth of the economy of Saudi Arabia in 2021 can reach 2.6 percent and 3.9 percent in 2022, and in South Africa – 3 percent and 2 percent, respectively.