The OECD is now much more optimistic than six months ago about the global performance of the economy and believes that the recovery this year and next will reach a pace that has not been seen since 1973, although there are elements of uncertainty, especially due to the evolution of the health situation.
In the presentation to the press of her biannual outlook report, the chief economist of the Organization for Economic Cooperation and Development (OECD), Laurence Boone , stressed that “the news is good” and that “the horizon is opening again “.
As a whole, Boone explained that the outlook for 2021 and 2022 has been revised upwards as it grows “at a rate not seen since 1973 thanks to the advancement of vaccination campaigns, better management of sanitary restrictions, as well as massive budgetary and monetary support. “
Now a progression of the world gross domestic product (GDP) of 5.8% this year and 4.4% next year is expected, which is, respectively, two and four tenths more than what was anticipated in December.
The chief economist acknowledged that this review is “massive” but pointed out that there are large imbalances between countries. He pointed out that there are some that have already managed to recover the GDP per capita they had before the COVID crisis, such as the United States, Russia, South Korea, Ireland and, above all, China.
At the other extreme , Argentina will take more than five years to recover that pre-crisis level, Mexico almost four years and Spain or Costa Rica three and a half years.
By the end of next year, the OECD now estimates that GDP will be about $ 3 trillion higher than it expected six months ago.
Boone explained that services, and in particular tourism and travel, are the sectors that are taking the longest to recover, and that is why the countries where they represent a significant part of the activity are lagging the most.
He also noted that “the health situation continues to pose uncertainties”, and therefore “the best policy to stimulate recovery is to fight the virus as quickly and as widely as possible.”
The Secretary General of the OECD, Ángel Gurría, regretted that in the face of a shock like the one caused by the coronavirus there has been “too little international cooperation” and hence also the inequalities in the recovery.
Gurría insisted that “the best economic policy to defeat the virus now is, first of all, vaccination”, which must reach all countries.
The OECD considered that in the short term, the diffusion of vaccines does not depend so much on ending patents, but on increasing production capacities, with faster management of licenses for the start-up of new manufacturing lines , technology transfer and the elimination of export restrictions.
Asked about the rebound in inflationary pressures, the economist said they should be “temporary” and largely reabsorbed next year. But he added that he is more concerned about the volatile behavior that financial markets could have in the face of these episodes of price increases.
Boone also did not rule out that growth is ultimately even stronger than it appears in his current forecasts, particularly if vaccination is accelerated or if a more important part of accumulated savings becomes consumption.
With information from EFE
