Vaccinations, Biden’s $1.9-T rescue package seen pushing global economic recovery

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The surge of global vaccinations for the coronavirus disease 2019 (Covid-19) and US President Joe Biden’s  proposed $1.9-trillion rescue bill is fueling optimism among rich nations that global gross domestic product (GDP) will grow up 5.6 percent this year.

This, as the Organization for Economic Cooperation and Development (OECD) revised its global economic outlook upward on Tuesday, citing the two factors.

The interim report anticipates the worldwide gross domestic product (GDP) will grow by 5.6 percent this year, a significant increase over the 4.2-percent growth forecast in December. The updated outlook for 2022 indicates 4-percent economic growth.

The report also noted that the global economy could reach pre-pandemic levels within a few months.

“World output is expected to reach pre-pandemic levels by mid-2021 but much will depend on the race between vaccines and emerging variants of the virus,” the Paris-based organization said in a statement.

The OECD said that although vaccine distribution has been uneven, the increase in production and administration of doses could get ahead of potential virus mutations. Such efforts could allow governments to relax pandemic mitigation efforts and boost consumer spending, providing for an even better economic outlook than currently projected.

 

If, however, such efforts fail to cut infection rates or curb the spread of Covid-19 variants, business confidence could lag.

 

“Speed is of the essence,” OECD Secretary-General Angel Gurría said. “There is no room for complacency.”

 

“Vaccines must be deployed faster and globally. This will require better international cooperation and coordination than we have seen up to now. It is only by doing so that we can focus our attention on building forward better and laying the foundations for a prosperous and lasting recovery for all,” he added.

India is expected to see the largest economic boost in 2021, the report stated, with 12.6-percent growth – followed by China (7.8 percent) and the United States (6.5 percent).

Projected US economic growth indicates a 3-percent revision compared to the December outlook due to Biden’s $1.9-trillion American Rescue Plan – which the House is expected to pass this week. Biden has said he will immediately sign the bill immediately after it’s sent to his desk.

The OECD said the large-scale relief package will increase upswings in both the US and international economies.


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