The Organization for Economic Cooperation and Development (OECD) said Tuesday it expects the global economy to rebound from the coronavirus pandemic next year and grow as much as 4.2%.
At a Paris news conference, OECD Secretary General Angel Gurria said the group forecasts the global economy will grow 4.2% in 2021 after shrinking by the same 4.2% this year.
He admits that outlook appears to be "vigorous," but he predicts nearly all the world's economies will be smaller at the end of 2021 than they were at the end of 2019.
Gurira says recent announcements regarding promising vaccines have provided some much needed hope. But, he added, "we're not out of the woods yet. Many countries are currently fighting a resurgence of the virus. And the re-imposition of containment measures is denting the economic rebound that had begun."
The OECD predicts the 2021 rebound in the global gross domestic product will be led by a strong recovery in China. OECD economist Laurence Boone said China and Korea handled the pandemic better than most countries, and he sees their economies accounting for a significant share of global growth.
The United States and Europe are expected to contribute less to the recovery than their weight in the global economy.
The OECD warns the recovery will be uneven across countries and sectors and could lead to lasting changes in the world economy. It says countries with solid coronavirus testing, tracking and isolation programs, and where vaccines are distributed effectively, should perform relatively well.
But the organization warns that policymakers will need to retain both public health and fiscal support while acting decisively for the momentum to pick up. It said the 2020 economic damage would have been far worse, had it not been for massive government support to help people and businesses.