NEW DELHI: The Organisation for Economic Co-operation and Development (OECD), a club of mostly rich nations, predicted on Tuesday that the world economy will return to pre-pandemic growth levels by the end of next year, but slashed its 2021 forecast and warned that the recovery will be uneven across countries and downside risks persist.
From a contraction of 4.2 per cent this year, global gross domestic product (GDP) is expected to bounce back to a growth pace of 4.2 per cent in 2021, the 37-nation OECD said in a review of the global economic outlook, report agencies.It reduced its growth forecast from 5 per cent it had predicted in September. The pace of growth is expected to slow to 3.7 per cent in 2022.
India is expected to rebound to grow 7.9 per cent in 2021 after recording a contraction of 9.9 per cent this year (2020-21 in its case) and expand 4.8 per cent in 2022.
“For the first time since the pandemic began, there is now hope for a brighter future. Progress with vaccines and treatment have lifted expectations and uncertainty has receded. Thanks to unprecedented government and central bank action, global activity has rapidly recovered in many sectors, though some service activities remain impaired by physical distancing,” OECD chief economist Laurence Boone wrote in the report.
“The collapse in employment has partially reversed, but large numbers of people remain underemployed. Most firms have survived, albeit financially weakened in many cases. Without massive policy support, the economic and social situation would have been calamitous. The worst has been avoided, most of the economic fabric has been preserved and could revive quickly, but the situation remains precarious for many vulnerable people, firms and countries,” she wrote.
OECD projected that the economic recovery from the Covid-19 pandemic will be uneven across countries, potentially leading to lasting changes in the world economy. The countries and regions with effective “test, track and isolate systems,” where the vaccination will be deployed rapidly, are likely to perform relatively well, though the overall weakness in global demand will rein them in.