Categories: BusinessLatest

Vaccine Rollout, US Stimulus Boost Global Economic Outlook, OECD Says

The global economic outlook has brightened as vaccine rollouts gain speed and the United States launches a vast new stimulus package, the OECD said on Tuesday, hiking its forecasts.

The world economy is set to rebound this year with 5.6% growth and expand 4.0% next year, the Organisation for Economic Cooperation and Development said in its interim economic outlook.

That marked a sharp increase from its last outlook in early December, when the Paris-based policy forum forecast global growth of 4.2% this year and 3.7% next year.

But important risks loomed over the improved outlook, notably in the form of how fast authorities get vaccine shots to people, how soon restrictions are lifted and whether new variants are kept in check.

“The top policy priority is to ensure that all resources necessary are used to produce and fully deploy vaccinations as quickly as possible,” the OECD said in the report.

Global gross domestic product was seen returning to pre-pandemic levels by the middle of this year, albeit with large divergences between countries.

While the vaccine rollout would give a shot in the arm to the global economy, the United States’ planned $1.9 trillion stimulus package would cascade down to other countries, adding more than a percentage point to global growth.

The U.S. economy would grow 6.5% this year and 4.0% next year, the OECD said, ramping up its forecasts from expectations in December for 3.2% in 2021 and 3.5% in 2022.

The OECD estimated the package, which includes $400 billion in one-time payments of $1,400 to many Americans, would boost U.S. output by around 3-4% on average in its first full year.

With 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.

Meanwhile, the stimulus would be a boon for the United States major trading partners, boosting growth by 0.5-1 percentage point in Canada and Mexico, and between 0.25-0.5 in euro area and China, the OECD said.

Reuters

Follow us on:

AriseNews

Recent Posts

Court Dismisses Case Against Protesters Charged Over Protests, Releases Minors Charged With Treason

An Abuja court has struck out the case against #EndBadGovernance protesters as the AGF discontinued…

1 hour ago

Britain Detects Two Additional Cases Of New Mpox Variant, Total Reaches Three

The UK has confirmed two more cases of the new mpox variant, clade Ib

1 hour ago

Ekiti Chief Judge Oyewole Adeyeye Passes Away From Injuries Sustained In Court Building Collapse

Ekiti mourns as Chief Judge Justice Adeyeye dies, succumbing to injuries from a court building…

2 hours ago

Boeing Workers End Seven-Week Strike After Accepting 38% Pay Increase

Boeing workers have accepted a new contract with a 38% raise, ending a seven-week strike…

2 hours ago

Trial Underway for Eight People Accused of Inciting Murder of Teacher Samuel Paty

Eight individuals are on trial in Paris, accused of inciting the murder of teacher Samuel…

2 hours ago

Indonesian Government To Evacuate 16,000 Residents After Mount Lewotobi Eruption

Indonesia is evacuating 16,000 residents after Mount Lewotobi erupted, resulting in nine deaths and significant…

3 hours ago