The economies of China and Indonesia will lead the world in 2021, according to a new report from the Organisation for Economic Co-operation and Development (OECD).
The OECD forecast in its June Economic Outlook that a second wave of infections at the end of the year could knock an initial economic rebound off course.
“Europe and the US are now bearing the brunt of a resurgence of the virus, stalling the recovery. Global GDP (Gross Domestic Product) in the fourth quarter of 2020 is expected to be three per cent below the same quarter last year, while for the Euro area and the US the decline is projected to be 7.3 per cent and 3.2 per cent, respectively,” the OECD said in a press release.
Many parts of the US, in particular, are facing huge economic uncertainty due to the amount of COVID-19 cases. Europe and the UK have had to enforce restrictive lockdowns to stem the amount of COVID-19 cases. More than 100 people died from COVID-19 on Tuesday in the following countries according to Worldometer: South Africa, 109; Greece, 111; Switzerland, 117; Indonesia, 136; Austria, 141; Bulgaria, 153; Hungary, 154; Colombia, 169; Turkey, 190; Romania, 199; Ukraine, 221; Mexico, 285; Iran, 382; India, 431; Spain, 442; Poland, 449; France, 466; Germany, 497; Russia, 569; the UK, 603; Brazil, 652; Italy, 785; and the US, 2083.
The OECD said the prospect of a number of COVID-19 vaccines becoming widely available next year has lifted hopes for a faster recovery. Pfizer/BioNTech and Moderna have both submitted vaccines for emergency use authorisations in the US and Europe.
“Policymakers will need to retain both public health and fiscal support while acting decisively for the momentum to pick up,” the OECD said.
“Global GDP in the fourth quarter of 2020 is expected to be three per cent below the same quarter last year, while for the Euro area and the US, the decline is projected to be 7.3 per cent and 3.2 per cent, respectively.
“Activity will continue to be restricted with social distancing and partly-closed borders most likely remaining through the first half of 2021. The global economy is expected to gain momentum only gradually, as vaccines are deployed throughout OECD countries in the course of 2021. After falling sharply by 4.2 per cent this year, world GDP is projected to rise by 4.2 per cent in 2021, with China expected to account for over a third of that growth.
“The recovery will be uneven across countries and sectors and could lead to lasting changes in the world economy. 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.”
China’s GDP is predicted by the OECD to soar eight per cent in 2021, with Indonesia’s rising 7.9 per cent. The third-fastest rising economy next year is predicted to be France, with a six per cent growth.
China’s economy is the only country predicted to experience growth in 2020 (1.8 per cent) with the worst affected economies being Argentina (-12.9 per cent) and the UK (-11.2 per cent). Argentina’s economy is forecast to grow 3.7 per cent and the UK’s increasing 3.2 per cent in 2021.