(Kitco News) – The world economy is set to rise this year with a rebound of 5.6% in growth and an expansion of 4.0% next year, the Organisation for Economic Cooperation and Development said in its interim economic outlook.
This is a massive increase from its last outlook in early December, when the OECD forecast global growth of 4.2% this year and 3.7% next year. The OECD said “The top policy priority is to ensure that all resources necessary are used to produce and fully deploy vaccinations as quickly as possible,”.
In terms of country-specific forecasts, the OECD expects China’s GDP to expand 7.8% this year and 4.9% next year in its latest economic outlook. The vaccine rollout would give a shot in the arm to the global economy, the United States’ planned $1.9 trillion stimulus package would trickle down to other countries, adding more than a percentage point to global growth. Adding to this the group (OECD) estimated the package, which also includes $400 billion in stimulus cheques of $1,400 to many Americans, would boost U.S. output by around 3-4% on average in its first full year.
Their outlook for jobs (US) was also pretty upbeat, the report suggested as public money flooding into the world’s biggest economy, the package could lead to the creation of up to three million U.S. jobs by the end of the year but could also increase inflation by 0.75 percentage points per year on average in the first two years.
The report said “Prospects have improved over recent months with signs of a rebound in goods trade and industrial production becoming clear by the end of 2020. Global GDP growth is now projected to be 5.6% this year, an upward revision of more than 1 percentage point from the December OECD Economic Outlook. 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.”.