Global Economic Recovery Expected to Lose Steam This Year
September 20, 2021
The Organization for Economic Cooperation and Development (OCED) has lowered its global growth forecast for the remainder of the year, attributing the slowdown to the Delta variant of the Covid.
In its latest quarterly projections, the research group lowered its projections for both the U.S. and global economies. This is the first downgrade since last December when Covid case numbers were surging.
OCED lowered its growth expectations for the U.S. economy in 2021 to 6%, down from the 6.9% projection made in May. Outlook for the global economy’s growth in 2021 fell slightly to 5.7% from 5.8%. The group raised its growth forecast for the eurozone and left China’s unchanged, despite the potential economic fallout from the property development giant Evergrande, which is on the brink of collapse.
The group also increased its estimates of inflation this year, but expects that upward price pressure will ease next year as vaccination rates increase in Asia and other manufacturing hubs throughout the world.
Despite lowered expectations for the rest of 2021, the group feels that the global economic recovery is set to continue next year, as consumer demand for goods remains strong and many industries have not year returned to pre-pandemic levels. According to OCED, the U.S. economy will grow 3.9% next year, a bigger gain than the 3.6% previously forecast.