This week, the OECD released its latest Economic Outlook report which gave us an updated look at the pandemic’s impact on the world economy. Striking a surprisingly cautious, optimistic tone, the report finds that “global economic prospects have improved markedly in recent months,” revising its GDP growth forecast for 2021 upward by more than 1%, compared to the December issue of the same report.
Most likely boosted by the global rollout of vaccines from an increasing number of drugmakers, gradual state-by-state reopenings in the U.S., along with another round of federal stimulus, the OECD expects global GDP to grow by 5.6%this year, and continue the recovery with 4% growth in 2022.
These optimistic numbers however bank of a number of factors breaking our way as there still exists a high degree of uncertainty surrounding the virus. New virus mutations could spark another wave of infections during the vaccination campaign or even prove resistant to the vaccines currently deployed.
As the following chart shows, the OECD expects global economic output to return to pre-pandemic, i.e. Q4 2019 levels in the first half of this year, with the further growth trajectory depending on the speed of the vaccine rollout among other factors.