Despite the COVID-19 pandemic releasing one of the worst economic downturns to all Western G2O economies since the Great Depression, the OECD’s Interim Outlook, released Wednesday Sept. 16/2020, offered a glimmer of hope for the world economy in the second half of 2020, as the organization believes the downturn will not be as horrific as previously expected.
Though, the news isn’t entirely good. The previously made predictions on the economic fallout caused by the virus have allowed policy-makers to turn the monetary taps on full power to help boost economies and provide funds for those left unemployed. These benefits, which have helped immensely in the short run, will be greatly reduced or even eliminated soon, as evidence by both this report and the prospect of a “smaller” (and getting smaller) stimulus package from Capital Hill in Washington. Permanently closed businesses and those still out of work will undoubtedly struggle.
OECD’s latest economic report showed that the world economy will contract by -4.5% in 2020, compared to the original estimate of -6%.
The bullish report also expects the world economy to expand by 5% in 2021, though, the OECD continued to reiterate within the report of the high economic uncertainty due to the constantly changing nature of the pandemic. The OECD also made it clear that the key to continued support for the global economy will be a cocktail of fiscal, monetary, and structural policy support.
The OECD, based in Paris, is an organization (based mainly of rich countries) aimed at promoting economic progress and world trade.
Here’s the link to the full report: http://www.oecd.org/economic-outlook/september-2020/
Works Cited:
https://www.zerohedge.com/markets/collapse-global-growth-not-bad-oecd-warns-no-v-shaped-recovery