The world economy will bounce back to its pre-pandemic levels by the end of next year, a global watchdog predicted Tuesday, though that recovery will be uneven across the countries and big risks remain.
In a wide-ranging report on the economy, the Organization for Economic Cooperation and Development said that progress on coronavirus vaccines means that the outlook has improved for the first time since the pandemic began.
Speaking at an OECD news conference, its Secretary General, Angel Gurria cast a cautious but positive note saying “For the first time since the pandemic hit in early 2020, we have hope. The good news about vaccines has instilled a degree of optimism… but we are not out of the woods yet.”
The OECD predicts the global economy will shrink about 4.2% this year and rebound by the same rate in 2021.
But Gurria says that “this would still leave all OECD economies smaller at the end of 2021 than they were at the end of 2019.”
China, which has brought its virus infections under control better than many major economies, will account for a big part of that economic recovery, while Europe, Japan and the U.S. will lag, the OECD said.
The organization, which advises countries on economic policy, said that governments should continue to support people who have been hit hardest by the pandemic and the restrictions on public life and businesses.
It recommends investing public money in areas that deliver long-term benefits like health care, education, reducing inequality and fighting climate change.
It said that global cooperation is sorely needed to maximize the impact of government efforts to bring the economy back to health and in particular in rolling out the vaccines against Covid-19.