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Even with vaccines, a global recovery will be slow, the O.E.C.D. says. | Press "Enter" to skip to content

Even with vaccines, a global recovery will be slow, the O.E.C.D. says.

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The world will start to recover only gradually next year from a devastating global recession brought on by the coronavirus pandemic, but the revival is unlikely to repair an income divide that is leaving more people around the world poorer because of the crisis, the Organization for Economic Cooperation and Development said Tuesday.

The organization, in its half-yearly economic outlook, forecast the global economy would grow by 4.2 percent next year. Led by a massive rebound in China, the momentum is likely to pick up only after the summer.

Even then, most economies will be smaller at the end of 2021 than they were at the end of 2019. That’s because lockdowns to contain the pandemic have carved $7 trillion out of global gross domestic product, Angel Gurría, the O.E.C.D.’s secretary general, said during an online news conference.

“The impact is massive,” Mr. Gurría said. “In human and economic terms this pandemic will have been extremely costly,” he said, adding: “There is hope, but we are not out of the woods yet.”

The notable exception is China, which curbed the pandemic with aggressive quarantine policies. It has rebounded quickly and will end the year with growth of around 10 percent, said Laurence Boone, the organization’s chief economist. South Korea, Sweden and India have also weathered the economic crisis far better than most European countries and nations in Latin America, which have at times struggled to contain the virus, the organization said.

The recovery in Western countries especially is likely to remain fragile as governments continue social distancing policies and keep borders partly closed through the first half of 2021. It may also take at least a year for governments to fully roll out campaigns to vaccinate citizens against the coronavirus, the organization said.

The O.E.C.D. urged governments to continue shielding their economies from the fallout by extending financial support programs and strengthening national health care and social safety nets.

But even with such support, it said, millions of small and medium-sized businesses that are the main drivers of job creation are facing mounting debt levels putting their survival and capacity to invest and create jobs at risk.

The crisis has also worsened income inequality. Today, nearly half of all low-income adults in the 37 countries that are members of the organization have trouble paying their bills, while a third have had to get food from a food bank.

Their children have also suffered disproportionately. While the children of well-off parents have been able to plug into remote schooling fairly easily, dropout rates from online schooling for children in low-income households have been massive, Ms. Boone said, leaving them far behind their peers.

Mr. Gurría said the cost to governments of maintaining social and economic support programs is worth it if it allows countries to ride out the storm until a vaccine is widely available and business activity can resume.

“With the availability of vaccines there is an even stronger case for large scale support of the economy in the remaining months of the pandemic,” he said.


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