Global economic outlook has improved with the deployment of vaccines and additional fiscal stimuli states OECD report. Global GDP growth is expected at 5.6pc in 2021, up one percentage point from the earlier estimate, with China growing at 7.8pc, 0.2pc lower than December estimate and India growing at 12.6pc, 4.7pc higher than the prior estimate.
OECD’s March 2021 outlook emphasises on marked improvement in global economies in the recent month supported by vaccination efforts and government spending. Global production is expected to reach the pre-pandemic level by June 2021. But the economic block cautioned that output will depend on the effectiveness of vaccines on different variants of the virus. Some countries will fail to recover even at the end of 2022.
The economic rebound has been faster-than-expected in several emerging-markets. Economic activities in India, China and Turkey breaching pre-pandemic levels supported by fiscal measures and a recovery in the manufacturing and construction sectors.
Asia-Pacific countries including Japan, Korea and Australia lag a bit which indicates strong broader revival in manufacturing sector. Japan’s GDP growth is expected at 2.7pc in 2021, Korea 3.3pc and Australia 4.5pc. Improved fiscal conditions and financial stimulus have improved economic activity in the US, while major European economies are recovering at a modest pace amid extended disruptions due to renewed COVID-19 outbreaks hurting the services sector. The US economy is expected to grow at 6.5pc, while the UK at 5.1, Euro area 3.9pc and Canada 4.7pc.
Among G20 countries, Indonesia is expected to grow at 4.9pc, Russia 2.7pc, Turkey 5.9pc and Mexico 4.5pc.
OECD stressed that the roll out of vaccines need to be faster across the globe to boost recovery, fiscal policy should be more streamlined and governments should ensure support to youth and workers in worst-effected sectors. The organisation also emphasised on reducing the digital and green investment gap.