The economic organization is concerned about the impact of new viral variants on economic recovery. Uncertainties related to inflation and government debt are also weighing on economic expectations, according to the OECD.
Economic Organization The OECD weakened its forecast for global economic growth slightly from its September forecast. The OECD still believes the global economy will grow at a good 5.6 percent this year. The forecast was only 0.1 percentage point lower than before.
The OECD hopes that vaccines will be distributed more quickly around the world to prevent the emergence of favorable breeding grounds for the virus.
According to the organization, there is also growing uncertainty on the horizon of the global economy about the development of inflation, the related monetary policy of central banks and also the use of government debt.
Organization believes that economic growth will remain strong next year and that the world economy will continue to grow by 4.5% next year. In 2023, growth would slow to 3.2 percent.
However, according to the OECD, growth is very unevenly distributed as different parts of the world recover from the pandemic at different rates. Economies are now also undergoing structural change hidden under a pandemic.
According to the OECD, not all sectors of the economy will return to pre-pandemic levels. There are irreversible changes in technology and behavior. The workforce has moved to new sectors.
According to the organization, this is reflected in the fact that there is already an acute labor shortage in some sectors, although the total number of people in employment has not returned to pre-pandemic levels.
Health, production bottlenecks, tightening inflation and possible wrong policies are now a growing concern in the economic organization.
The OECD believes that people’s return to work will gradually break the global imbalance between production and demand and lead to a slowdown in inflation. However, there are risks and uncertainties that could lead to a tightening of monetary policy. However, the OECD hopes for restraint from central banks.
The economic organization is also concerned that governments have no plans to reduce the use of debt, even though economic growth is now well under way. The OECD believes that the recovery from the pandemic should end soon.
“Fiscal support should now focus on productive investment, including education. Heads of state should immediately draw up a medium-term plan for fiscal consolidation. They have not been seen, ”the OECD writes.
.
#World #economy #OECD #lowers #global #economic #growth #forecast #calls #faster #vaccination
