World Video | Defence | Foreign Affairs | Natural Events | Trade | NZ in World News | NZ National News Video | NZ Regional News | Search

 

The Need For Speed: Faster Vaccine Rollout Critical To Stronger Recovery, Says OECD

A global economic recovery is in sight but a faster and more effective vaccination rollout across the world is critical, while respecting necessary health and social distancing measures, according to the OECD’s latest Interim Economic Outlook.

Activity in many sectors has picked up and adapted to pandemic restrictions over recent months. Vaccine deployment, although uneven, is finally gaining momentum and government fiscal stimulus – particularly in the US – is likely to provide a major boost to economic activity.

But the pandemic is widening gaps in economic performance between countries and between sectors, increasing social inequalities, particularly affecting vulnerable groups, and risking long-term damage to job prospects and living standards for many people.

The Interim Economic Outlook calls for ramping up vaccination, for swifter, more targeted fiscal stimulus to foster output and confidence, and to maintain income support for people and businesses hard hit by the pandemic while preparing the ground for a sustainable recovery.

“Speed is of the essence,” said OECD Secretary-General Angel Gurría. “There is no room for complacency. Vaccines must be deployed faster and globally. This will require better international co-operation and co-ordination 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.”

The OECD sees global GDP growth at 5.6% this year, an upward revision of more than 1 percentage point since its projection in December 2020, and 4% in 2022. World output is expected to reach pre-pandemic levels by mid-2021 but the pace and duration of the recovery will depend on the race between vaccines and emerging variants of the virus.

World GDP evolution

The outlook for global growth would be better than currently projected – and approach pre-pandemic projections for activity – if the production and distribution of vaccines accelerates, is better co-ordinated around the world and gets ahead of virus mutations. This would allow containment measures to be relaxed more rapidly. But if vaccination programmes are not fast enough to cut infection rates or if new variants become more widespread and require changes to current vaccines, consumer spending and business confidence would be hit.

In the OECD’s central scenario, US growth is projected to be 6.5% in 2021, an upward revision of more than 3 percentage points since December, partly reflecting the large-scale fiscal stimulus now planned with a sustained pace of vaccination. This also helps to lift output around the world. In the euro area, where the level of fiscal stimulus is lower and vaccine rollout slower, the Interim Economic Outlook sees GDP rising 3.9%, a 0.3 percentage point upward revision.

Prospects are brighter in the Asian-Pacific region where several countries have effectively contained the virus and where industrial activity has regained dynamism. In China, GDP growth is projected to be 7.8% this year; in Japan 2.7%; in Korea 3.3%; and in Australia 4.5%.

The recovery is likely to be more moderate in the emerging market economies of Latin America and Africa amid a resurgence of the virus, slow vaccine deployment and limited scope for additional policy support.

Presenting the Interim Economic Outlook today, OECD Chief Economist Laurence Boone said vaccination programmes and stimulus measures should work hand in hand.

“Widespread vaccination of the adult population is the best economic policy available today to get our economies and employment growing again,” she said. “If we are at war with the virus then we need to put vaccine production on a war footing, provide the necessary resources and speed up deployment across the world.”

“If we don’t get enough people vaccinated quickly enough to allow restrictions to be lifted, the recovery will be slower and we will undermine the benefits of fiscal stimulus,” she added.

The improved prospects of a global recovery have led to financial market expectations of higher inflation although the Interim Economic Outlook says underlying price pressures generally remain mild in advanced economies. In emerging market economies, inflation could rise further. Public debt levels have risen sharply almost everywhere, but debt-servicing costs in most OECD economies continue to benefit from very low interest rates protecting fiscal sustainability.

The report says the vital support provided by governments to preserve jobs and businesses should remain in place while economies are still fragile and hampered by containment measures. Particular attention needs to be paid to supporting young people and the less skilled to avoid a repeat of the long-term damage caused to the job prospects of these vulnerable groups after the financial crisis of 2008.

Download the Interim Economic Outlook.

For the report and more information, visit the Interim Economic Outlook online. Other OECD policy responses to the pandemic are available on the COVID-19 hub.

© Scoop Media

 
 
 
World Headlines

 

Timor-Leste: UN Agencies Support Response In Wake Of Deadly Floods

United Nations agencies in Timor-Leste are supporting response efforts, as floods and landslides left widespread damage across the country, including in the capital, Dili. According to media reports, at least 21 people died in the country and many ... More>>

Myanmar: Stop ‘Widespread Violence’ Against Children, UN Officials Urge

Senior United Nations officials on Thursday strongly condemned the ongoing violence by Myanmar’s security forces against civilians, including children, as the members of the Security Council expressed alarm at the rapidly deteriorating situation in ... More>>

COVID-19 Origins Report Inconclusive: We Must ‘Leave No Stone Unturned’ – WHO Chief

The report from a team of international scientists assembled by the World Health Organization (WHO) to examine how COVID-19 first spread to humans was published on Tuesday, and was described by the UN health agency’s chief as a welcome start, ... More>>

Focus On: UN SDGs

UN: Growing Calls For Revamping Development Financing To Ensure Sustainable Global Recovery From COVID-19 Pandemic

Forum to highlight new initiatives to tackle inequalities exacerbated by pandemic With many economies reeling as a result of the COVID-19 pandemic, and as inequalities continue to widen, world leaders will discuss options to unlock concrete investments ... More>>

How Can We Vaccinate The World? Five Challenges Facing The UN-Backed COVAX Programme

The aim of the UN-backed COVAX scheme is to get two billion vaccine doses into the arms of around a quarter of the population of poorer countries by the end of 2021. What are the main challenges that need to be overcome, if this historic global effort ... More>>

Department Of Global Communications: UN Secretary-General António Guterres’ Message For World Health Day 2021

5 APRIL 2021 As COVID-19 Reveals Immoral Inequities in Health System, Secretary-General Observance Message Calls for Applying Policies, Assigning Resources to Ensure Everyone Thrives Following is UN Secretary-General António Guterres’ message for World ... More>>