OECD: World Economy Forecast to Contract by 4.5% in 2020
While much of the world economy collapsed under the weight of the deadly coronavirus pandemic in the first half of 2020, it appears that copious amounts of government spending and eventual lifting of restrictions has put global economic output in a slightly better position heading into the second half of the year.
According to a recent report by the Organization for Economic Cooperation and Development (OECD), output on the global scale is projected to fall by 4.5% in 2020, which is a slight improvement from the previous June forecast of -6%. Albeit the decline in output is better than previously anticipated, it still amounts to a significant drop compared to recent history, with future outlooks slipping further into uncertainty as worldwide infection numbers steadily climb to the 30 million mark.
The OECD notes that although output did pick up over the summer months following the lifting of restrictions across most countries, the pace of the recovery is beginning to lose momentum. Moreover, the recovery will also be staggered and uneven across countries, especially in China, the US and the euro area. Thus far, China is the only country that is expected to actually experience growth of 1.8%, meanwhile US and the euro zone economy is projected to decline by 3.8% and 7.9%, respectively.
In the meantime, the OECD is expecting that countries including Argentina, India, Mexico, the UK, and South Africa will be subject to worsening conditions, with GDP levels falling by more than 10%. On a separate note, OECD is forecasting that by 2021, global output will rise by 5%.
Information for this briefing was found via OECD. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
