OECD lowers global growth forecasts for 2021. It expects global output to expand 5.7% in 2021.

PARIS : The OECD warned on Tuesday of an '' uneven '' global economic recovery as it lowered its 2021 growth forecasts for the world and the United States while raising the outlook for Europe.

The world economy has bounced back this year on the back of stimulus measures, the rollout of effective Covid-19 vaccines and the resumption of many economic activities, the Organisation for Economic Cooperation and Development [OECD] said.

But the Paris based organisation voiced concerns about lower vaccination rates in poorer countries.

''The recovery remains very uneven, with strikingly different outcomes across countries,'' the OECD said in its interim outlook.

Global gross domestic product [GDP] has surpassed its prepandemic level following last year's Covid-induced recession.

Global output is now expected to expand by 5.7% this year, down 0.1 percentage point from the organisation's previous forecast in May. But the outlook for 2022 has slightly improved, with 4.5% growth now expected, up by 0.1 point.

''Output and employment gaps remain in many countries, particularly in emerging markets and developing economies where vaccination rates are low,'' the report said.

The OECD lowered its growth outlook for the US, from 6.9% to 6% this year. The US Congressional Budget Office has forecast 6.7% growth for the world's top economy.

The Delta variant hit the US economy harder in the second quarter ''but it is picking up again very strongly,'' the OECD's chief economist, Laurence Boone, said in a new conference.

The OECD's eurozone forecast was raised by one point to 5.3%, thought the outlook varied within the single-currency block, with higher growth now expected in France, Italy  and Spain while Germany was not performing as well.

The growth prospects of Argentina, Brazil, Mexico, South Africa, South Korea and Turkey have also improved, while those of Australia, Britain, Japan and Russia were lowered.

The forecast for China, the world's second-biggest economy and a driver of global growth, remained unchanged at 8.5%.

The impact of the Delta variant of the coronavirus has ''so far been relatively mild'' in countries with the high vaccination rates, but it has lowered the momentum elsewhere and added pressures to global supply chains and costs, the OECD said.

'' Sizeable uncertainty remains,'' the report said, warning that slow progress in vaccination drives and the spread of the virus mutations would lead to a weaker recovery and larger job losses.

'' What worries us even more is that many emerging markets with the exception of China are still far behind advanced ones for vaccination programme levels,'' Roone said. ''The situation is even worse in low-income countries.'' [AFP]


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