The world economy is on course to contract 4.5% this year, the
Organisation for Economic Cooperation and Development said,
which - though unprecedented in recent history - was up from the
6% contraction that it forecast in June.
Provided the virus is kept from spreading out of control, the
global economy will bounce back into growth next year by
expanding 5%, trimmed from a June forecast of 5.2%, the
Paris-based policy forum said.
However, a stronger resurgence of the virus or more strict
measures to contain it could chop 2-3 percentage points from the
2021 outlook, the OECD warned.
The OECD said its forecasts were built on the assumption that
local outbreaks would continue and would be targeted with local
action rather than nationwide lockdowns. It also assumed a
vaccine would not be widely available until late next year.
The OECD said governments and central banks' actions to support
households and companies' incomes had helped avert worse
downturns and should therefore be kept up as outbreaks keep
appearing sporadically.
Its brighter overall outlook for this year masked big
differences between major economies with the United States,
China and Europe seen performing better than feared while India,
Mexico and South Africa may do worse as they struggle to contain
the virus.
Having been the first country to experience the outbreak and
having moved swiftly to control its spread, China was forecast
to be the only country in the G20 group of economic powers to
see growth this year with an increase of 1.8%, up from a June
projection of a contraction of 2.6%.
Meanwhile, the U.S. economy, the world's biggest, was also
forecast to fare better this year than previously feared with a
contraction of 3.8%, still dire but far better than the -7.3%
forecast previously.
(Reporting by Leigh Thomas; Editing by Hugh Lawson)
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