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OECD raises growth forecasts on vaccine rollouts and US stimulus
The global economic outlook is improving as vaccine rollouts allow businesses to resume operations and as the United States pumps trillions of dollars into the world’s largest economy, the OECD said on Monday, nudging its forecasts higher.
The global economy is set to grow 5.8% this year and 4.4% next year, the Organisation for Economic Cooperation and Development said, raising its estimates from 5.6% and 4.0% respectively in its last forecasts released in March.
The global economy has now returned to pre-pandemic activity levels, but has not yet achieved the growth expected prior to the global health crisis, the OECD said in its latest Economic Outlook publication.
“The world economy is currently navigating towards the recovery, with lots of frictions,” OECD chief economist Laurence Boone said in an editorial to the Outlook.
“The risk that sufficient post-pandemic growth is not achieved or widely shared is elevated,” she added.
While vaccination campaigns were allowing advanced economies to gradually reopen for business, many emerging market economies were being held back by slow vaccination deployment and new covid-19 outbreaks, the OECD said.
The OECD said central banks in advanced economies should keep financial conditions relaxed and tolerate inflation overshooting their targets.
Leigh Thomas reports for Reuters.