The Organisation for Economic Cooperation and Development (OECD) said that the global economy occurred to be recovering faster from the coronavirus pandemic than previous predictions a few months ago, mainly driven from the progress in China and the U.S outlooks. The world economy is expected to contract 4.5%, although still an uncommon percentage in recent history, was improved from the 6% contraction in prediction last June.
The global economy is predicted to rebound into growth next year with an expected expansion of 5%, a little lower than June forecast of 5.2%. But the resurgence of the virus triggering more strict containment measures are forecasted to slash another 2-3 percentage points from next year outlook. The overall forecast was built on assumption that local outbreaks will still occur and tackled with local actions rather than nationwide lockdowns, and assuming the vaccine will not be widely available until the end of 2021. OECD said actions by government and central banks to support companies and households incomes had prevented worse decline and therefore should be kept up while local outbreaks still occur.
The lighter outlook for the overall year still covers the big differences between major economies as China, Europe and the U.S which showed better performance than predicted, compared to countries like South Africa, India and Mexico which expected to do worse as the countries were still struggling with the raging pandemic.
Having been the first nation experiencing the pandemic, China was foresees to be the only G20 country which is seeing growth this year, to see 1.8% expansion from the previous contraction of 2.6% in June. At the same time, the world’s biggest, the U.S economy, also predicted to perform better with -3.8% contraction than previous expectation, -7.3%.
