Global economy to grow 5.6% in 2021 if vaccine rollout is fast: OECD

Paris: The global gross domestic product (GDP) will grow at 5.6 per cent this year if Covid-19 vaccination rollouts are fast and effective enough across the world, the Paris-based Organization for Economic Cooperation and Development (OECD) said.

World output is expected to reach pre-pandemic levels by mid-2021 and the global economy is expected to grow by 4 per cent in 2022 after seeing 5.6 per cent growth in 2021, the OECD said in its latest Interim Economic Outlook issued on Tuesday.

The OECD projected the US economy to grow at 6.5 per cent in 2021 thanks to "significant fiscal stimulus along with faster vaccination", reporters said.

It forecast that GDP will rise 3.9 per cent in the euro area, "where the level of fiscal stimulus is lower and vaccine rollout slower".

Prospects are brighter in the Asia-Pacific region where several countries have effectively contained the virus and industrial activity has regained dynamism, the OECD said.

"In China, the GDP growth is projected to be 7.8 per cent this year; in Japan 2.7 percent; in Korea 3.3 per cent; and in Australia 4.5 per cent.

"The recovery is likely to be more moderate in the emerging market economies of Latin America and Africa amid a resurgence of the virus, slow vaccine deployment and limited scope for additional policy support," it added.

"Speed is of the essence," said OECD Secretary-General Angel Gurria.

"Vaccines must be deployed faster and globally. This will require better international co-operation and co-ordination than we have seen up to now."

OECD Chief Economist Laurence Boone said vaccination programs and stimulus measures should work hand in hand.

"Widespread vaccination of the adult population is the best economic policy available today to get our economies and employment growing again," she said.

"If we don't get enough people vaccinated quickly enough to allow restrictions to be lifted, the recovery will be slower and we will undermine the benefits of fiscal stimulus."