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The Organization for Economic Co-operation and Development said on Tuesday that a global economic recovery from the pandemic was finally taking hold, but it slightly lowered its forecast for global economic growth and warned that the rebound was benefiting rich countries more than to the developing world. because the distribution of vaccines occurs at an uneven pace.
Countries that have made great strides towards immunizing most of their populations are bouncing back much faster than those still struggling to get immunized, the OECD said, raising a host of related economic issues that plague the chains global supply and pose a risk to the future.
“The global shock that pushed the world into the worst recession in a century is now fading, and we now expect the recovery to return growth to its pre-crisis trend,” said Laurence Boone, chief economist of organization, in a press release. briefing.
But vaccination rates remain varied and many low-income countries and emerging markets, except China, are still far behind, added Ms Boone. “The failure of vaccination around the world puts us all at risk,” she said.
The warnings came as the OECD released its half-yearly economic forecast, in which it lowered its outlook for global growth, the US economy and emerging markets, but raised its outlook for Europe.
The global growth outlook for 2021 has been revised down slightly to 5.7% from 5.8%.
The Paris-based organization said the United States would grow at a 6% pace, down from the forecast of 6.9% in May, while the eurozone is expected to rise 5.3%, up from previous expectations of 4.3%. . Slower growth in Germany should be offset by faster-than-expected rebounds in France, Italy and Spain.
Growth is expected to slow next year after an extraordinary rebound from the recession, with the global economy expected to grow at a rate of 4.5% and the United States at 3.9%. The European economy will also cool, at an expected rate of 4.6 percent.
China, the world’s second-largest economy, is expected to grow 8.5% this year, before slowing to 5.8% in 2022.
But the robust numbers masked lingering problems within even the richest economies, where the recovery has benefited people unevenly.
While growth in the United States has returned to pre-pandemic levels, employment remains below what it was before the economic restrictions. In Europe, which deployed billions to protect its businesses and workers from mass unemployment and bankruptcy at the height of the crisis, jobs have been largely preserved.
And the virus and lagging vaccination rates continue to hamper the functioning of the global economy, disrupting supply chains, the OECD said.
“Some parts have not left factories in countries affected by virus outbreaks,” Ms. Boone said. As a result, many companies are running out of inventory and slowing down production, resulting in higher prices for a range of products.
At the same time, a rapid rebound in demand has sharply increased oil prices, which are 80% higher than a year ago, while shipping costs “have skyrocketed,” added Mrs. Boone.
These factors have helped fuel inflation, which has “risen sharply” in the United States and some emerging markets, according to the report, but is expected to subside once supply chain bottlenecks settle. faded away.
Inflation will subside faster from current alarming levels if immunization programs accelerate.
“If we continue to vaccinate and better adapt to living with the virus, the supply will start to normalize and that pressure will subside,” Ms. Boone said. “But for that we need to vaccinate more people. “
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