UK set for stronger post-Covid recovery, says OECD
The UK economy’s recovery from the pandemic is set to be stronger than previously thought, a leading international agency has suggested.
The Organisation for Economic Co-operation and Development says the UK is likely to grow 7.2% in 2021, up from its March projection of 5.1%.
The OECD raised its forecast for global growth to 5.8%, compared with the 4.2% it predicted in December.
However, it warned that growth would not be shared evenly.
The UK’s growth is set to be the fastest among the large rich countries, the OECD says.
UK Chancellor Rishi Sunak attributed the strength of the forecast to the success of the UK’s vaccine rollout and the government’s Plan for Jobs.
However, he cautioned that with debt at nearly 100% of GDP, there was a need to “ensure public finances remain on a sure footing”.
The OECD said prospects for the world economy had brightened, with activity returning to pre-pandemic levels.
However, they remained short of what had previously been expected by the end of 2022.
The OECD praised stimulus measures and swift vaccine rollouts in richer countries for boosting growth, but said the slow jab distribution in many developing countries threatened to blight their economic progress.
It said the recovery would remain uneven and vulnerable to fresh setbacks as long as a large proportion of the world’s population were not vaccinated.
Global growth will be led by a strong upturn in the US, where GDP is forecast to reach 6.9% this year, before easing to 3.6% in 2022, the OECD added.
Output in China has also caught up, but emerging-market economies, including India, may continue to have large shortfalls in GDP.
The strong forecast this year for the UK reflects the key role that vaccination plays in supporting economic recovery. It is the fastest growth among the large rich countries – and within the wider G20, it’s behind only India and China. But that also reflects the UK rebounding from a downturn that was one of the deepest.
