OECD raises global economic outlook on promise of COVID-19 vaccine

Dec. 1 (UPI) -- Global economic growth is expected to return to pre-coronavirus pandemic levels by the end of 2021, boosted in part by the promise of a vaccine, according to a report Tuesday by the Organization for Economic Cooperation and Development.

The OECD said in its 267-page report that the updated outlook anticipates the global economy to contract 4.2% at the end of 2020, slightly better than the 4.5% experts predicted earlier this fall.

In its updated projection, the OECD said the worldwide gross domestic product could increase to 4.2% in 2021.

"For the first time since the pandemic began, there is now hope for a brighter future," the OECD said in a statement.

"The worst has been avoided, most of the economic fabric has been preserved and could revive quickly, but the situation remains precarious for many vulnerable people, firms and countries."

The organization said China is expected to account for over a third of the growth next year.

"The recovery will be uneven across countries and sectors and could lead to lasting changes in the world economy," the OECD added. "Countries with effective testing, tracking and isolation programs and where effective vaccinations can be distributed rapidly should perform relatively well, but a high degree of uncertainty persists."

The OECD said global GDP has continued to contract in the fourth quarter, about 3% lower than the final quarter of 2019. The U.S. economy, it says, is projected to decline 3.2% in the final three-month period and Europe's is projected to tumble 7.3%.

"There is hope, but that hope needs to be turned into reality," Laurence Boone, OECD chief economist, said in a statement. "The pandemic is a global problem. International cooperation is needed now more than ever."

Boone added that the immediate future will hinge on global leadership, promises of an effective COVID-19 vaccine and restarting multilateral negotiations on trade, climate and digital standards.

He said those things should "pave the way for a more sustainable growth and a society where opportunities are available for all."