Logo of Phnom Penh Post newspaper Phnom Penh Post - OECD trims forecast for 2021 global GDP growth

OECD trims forecast for 2021 global GDP growth

Content image - Phnom Penh Post
'The top policy priority remains the need to ensure that vaccines are produced and deployed as quickly as possible,' the OECD said. AFP

OECD trims forecast for 2021 global GDP growth

The Organisation for Economic Co-operation and Development (OECD) warned on December 1 that the Omicron coronavirus variant threatens the global economic recovery, as it lowered the growth outlook for 2021 and appealed for a swifter rollout of Covid vaccines.

The global economy is now expected to expand by 5.6 per cent this year, down from an earlier forecast of 5.7 per cent, the OECD said in its updated economic outlook which warns that low vaccination areas could create “breeding grounds” for deadlier virus mutations.

Its forecast for 2022 remains unchanged at 4.5 per cent, but the report was released only days after Omicron was detected.

“We are concerned that the new variant of the virus, the Omicron strain, is further adding to the already high levels of uncertainty and risks, and that could be a threat to the recovery,” OECD chief economist Laurence Boone said at a press conference.

The report by the Paris-based organisation said the global recovery is continuing to progress, but warned that it “has lost momentum and is becoming increasingly imbalanced”.

While the OECD said it was “cautiously optimistic” about the recovery, it warned that health, high inflation, supply chain bottlenecks, and potential policy missteps are “all key concerns”.

“The top policy priority remains the need to ensure that vaccines are produced and deployed as quickly as possible throughout the world, including booster doses,” the OECD said.

In the “more benign scenarios”, outbreaks could continue to prompt restrictions on people’s movements, which could have long-lasting consequences on labour markets, production capacity and prices.

“The harshest scenario is that pockets of low vaccination end up as breeding grounds for deadlier strains of the virus, which go on to damage lives and livelihoods,” Boone warned in an editorial in the report.

The report does not take into account the possible impact of the Omicron variant.

Analysts at Oxford Economics say the new strain could shave 0.25 percentage points off global growth next year if it causes mild effects, but it would cost two percentage points if it is more dangerous and a large part of the global population was forced into lockdowns.

MOST VIEWED

  • Omicron patients can stay home: PM

    The Ministry of Health has issued a directive on the treatment of people who have tested positive for the highly transmissible Omicron coronavirus variant, following a suggestion from Prime Minister Hun Sen on the night of January 21. The directive permits home quarantine for those who

  • The effects of the USD interest rate hike on Cambodian economy

    Experts weigh in on the effect of a potential interest rate expansion by the US Federal Reserve on a highly dollarised Cambodia Anticipation of the US Federal Reserve’s interest rate hike in March is putting developing economies on edge, a recent blog post by

  • Cambodia’s first ever anime festival kicks off Jan 22 at capital’s F3 centre

    Phnom Penh's first ever Anime Festival will bring together fans, artists, shops and other local businesses with ties to the Japanese animation style for cosplay competitions, online games, pop-up shops and more on January 22, with Friends Futures Factory (F3) hosting. F3 is a project that

  • Hun Sen gets 4th Covid shot, urges compatriots to follow

    Prime Minister Hun Sen and his wife Bun Rany on January 14 received their fourth dose of Covid-19 vaccine and called on compatriots to follow suit as the Omicron coronavirus variant continues to spread in the community. This marks the launch of Cambodia's fourth-dose vaccination campaign,

  • Fourth dose Covid booster drive jabs 43K in two days

    In the first two days of the fourth-dose Covid-19 vaccination campaign, more than 43,000 people volunteered to get the jabs, while over 4.6 million people have received a third shot. Health ministry spokeswoman Or Vandine said that fourth-dose vaccinations, which began on January 14 exclusively with the Pfizer

  • Singapore backs Cambodia's efforts on Myanmar

    Singaporean Prime Minister Lee Hsien Loong supports Cambodia in its efforts to seek a solution to the ongoing Myanmar crisis as the chair of ASEAN. Lee expressed his support during a meeting with Prime Minister Hun Sen via videoconference on January 14, with the talks focused