OECD "Global Economic Recovery... Concerns Over Imbalances Between Countries"

The Organisation for Economic Co-operation and Development (OECD) expressed concern that while the global economy continues to recover, the pace of recovery shows significant disparities between countries.

In its economic outlook report published on the 1st (local time), the OECD revised the global economic growth rate for 2021 down by 0.1 percentage points from the September forecast to 5.6%, stating, "The situation is unusual, but the economic outlook is cautiously optimistic."

In the most positive scenario, the OECD forecast that the global economy will continue its recovery with growth rates of 4.5% in 2022 and 3.2% in 2023.

Most advanced economies are expected to return to their pre-COVID-19 pandemic growth trajectories by 2023, but low-income countries are predicted to face difficulties for a considerable period.

This is because differences in how countries respond to the COVID-19 pandemic have led to polarization in terms of infection rates and vaccination coverage.

In particular, the imbalance in vaccine distribution could create an environment conducive to the spread of another deadly variant or hinder cross-border movement, becoming a boomerang that hampers economic growth.

The growth rate forecasts for major economies this year are 5.6% for the United States, 5.2% for the Eurozone (19 countries using the euro), 8.1% for China, and 1.8% for Japan.

Among the Group of Twenty (G20) countries, India has the highest economic growth forecast for this year at 9.4%, followed by Turkey at 9.0%.

In Europe, the United Kingdom leads with 6.9%, followed by France at 6.8%, Italy at 6.3%, Spain at 4.5%, and Germany at 2.9%.

Inflation occurring everywhere and the uncertainty over how central banks will respond is another concern raised by the OECD.

The OECD projects that inflation will peak in 2021?2022 and gradually decline to about 3% on average across OECD member countries by 2023.

Laurence Boone, OECD Chief Economist, said, "The best central banks can do in the current situation is to wait for supply chain disruptions to ease and signal that they will act if necessary."

She added that if supply constraints persist amid robust GDP and employment growth and broad-based price increases, central banks may need to take action.

The OECD warned that the recovery of the global economy, which was shaken by the COVID-19 pandemic, presents an opportunity to reform public finances, and missing this chance would be a "mistake" with long-lasting consequences.

Regarding climate change, the OECD pointed out that there is "a lot of talk but insufficient action," urging governments to take measures to fulfill the commitments they have made to combat climate change.

This content was produced with the assistance of AI translation services.