World economy bouncing back from COVID-19 faster than expected, OECD says

The world economy is bouncing back from the pandemic crisis faster than expected, thanks in part to successful coronavirus vaccines and U.S. stimulus efforts, but the improvements are uneven and joblessness remains a big concern, according to a new forecast.

The Organization for Economic Co-operation and Development (OECD) on Tuesday raised its expectations for global GDP growth to 5.5 per centthis year and four per cent next year. That is up from a December forecast of 4.2 per cent growth in 2021 and 3.7 per centfor 2022.

After the virus plunged the world economy into crisis last year, the OECD now expects global output to surpass pre-pandemic levels by the middle of this year.

However, it warned of a divergence in progress, with faster growth in China and the U.S., while some other regions are expected to continue struggling until the end of 2022.

More vaccines needed

The Paris-based group also warned that new virus variants and too-slow vaccine rollouts could threaten chances of improvement for businesses and jobs.

WATCH: Consumers are waiting for scarce vaccines before getting out to spend money again, OECD says

Hurry up with the vaccines to boost economy says OECD

4 years ago

Duration 1:01

There is lots of money to spend in the world but people won't spend it until more of them are vaccinated, says the chief economist for the Organisation for Economic Co-operation and Development, Laurence Boone.

"World output is expected to reach pre-pandemic levels by mid-2021 but much will depend on the race between vaccines and emerging variants of the virus," the OECD said.

Nearly 10 million more people across the OECD's 36 mostly rich-country member states are unemployed now than before the crisis. And in poorer countries, "substantial job losses have increased poverty and deprivation of millions of workers," the report said.

"The top policy priority is to ensure that all resources necessary are used to produce and fully deploy vaccinations as quickly as possible throughout the world, to save lives, preserve incomes and limit the adverse impact of containment measures on well-being," the report said.

The OECD also said Canada could be poised for better-than-expected growth this year, mainly because it will benefit from a faster-than-expected recovery in its largest trading partner, the U.S.

The U.S. is now forecast to grow its GDP by 6.5 per cent this year. That's more than twice as much as was being predicted in the last OECD forecast, three months ago.