OECD warns of ‘patchy’ global recovery from Covid as it lowers UK bumper growth forecast – and improves inflation estimates
- OECD downgraded growth forecasts for UK and other major economies
- Warned that the recovery after the pandemic will be “uneven” with a disruption of supply
- UK is still expected to be fastest growing G7 country this year after great success
The OECD has sternly warned that Covid’s recovery will be ‘patchy’ today, as it lowered growth forecasts for the UK – and improved inflation estimates.
The economic body said there would likely be “remarkably” different fortunes for countries during the next phase of the pandemic.
It downgraded the outlook for some of the major states, including the United States, Canada and Germany, from previous figures for May. But France and Italy have seen their numbers increase.
Britain slashed real GDP growth expectations by 0.5 percentage points this year, although it is still expected to be the fastest growing G7 member after being hit hardest by Covid.
The OECD also lowered the forecast for 2022 by 0.3 percentage point to 5.2%.
And in a move that might worry ministers, he nearly doubled inflation estimates to 2.3% this year and 3.1% next year – although he suggested the effects are likely temporary. .
The OECD said there would likely be “remarkably” different fortunes for countries in the next phase of the pandemic
The OECD has nearly doubled UK inflation estimates to 2.3% this year – although it has suggested the effects are likely to be temporary
In its Interim Economic Outlook, the OECD said the rebound was prompted by stimulus, vaccine rollout and easing lockdowns.
But the Paris-based organization has expressed concerns about declining vaccination rates in the poorest countries.
“The recovery remains very uneven, with very different results from country to country,” the OECD said in its interim economic outlook.
Global gross domestic product has surpassed its pre-pandemic level and is now expected to rise 5.7% this year, down 0.1 percentage point from the previous forecast in May.
But the outlook for 2022 has improved slightly, with 4.5% growth now expected, up 0.1 point.
“Gaps in output and employment remain in many countries, particularly in emerging and developing market economies where vaccination rates are low,” the report said.
He warned that while the impact of the Delta variant had “so far been relatively slight” in countries with high vaccination rates, it had gained momentum elsewhere and increased pressures on global supply chains. and costs.
“Considerable uncertainty remains,” the report said, warning that slow progress in vaccination campaigns and the spread of viral mutations would lead to a weaker recovery and more job losses.
“What worries us even more is that many emerging markets, with the exception of China, are still far behind advanced levels of immunization programs,” Boone said.
“The situation is even worse in low income countries.
The OECD has lowered its growth outlook for the United States from 6.9 to 6.0 percent this year. That’s well below the US Congressional Budget Office’s forecast of 6.7 percent.
The euro area estimate was raised by one point to 5.3%, although the outlook varied considerably within the bloc.
Growth prospects for Argentina, Brazil, Mexico, South Africa, South Korea and Turkey have also improved, while those for Australia, Japan and Russia have been revised downwards.
The forecast for China, the world’s second-largest economy and engine of global growth, remained unchanged at 8.5%.
The UK slashed real GDP growth expectations by 0.5 percentage points this year, despite still being the fastest growing G7 member, having been hit hardest by Covid