The Organization for Economic Co-operation and Development (OECD) urged countries to step up the pace of vaccine distribution to curb the pandemic, stressing the “threat to economic recovery” of the Omicron variant.
The Paris-based organization stressed that the global recovery is increasingly unbalanced with lingering uncertainty about the emergence of new variants.
“The economic priority is the vaccine,” said the OECD, warning that the recovery from last year’s post-pandemic slump is faltering.
Global growth is expected to reach 5.6% this year before slowing to 4.5% in 2022 and 3.2% in 2023, the organization noted in its latest economic outlook.
As the global economy rebounds strongly, the post-pandemic surge in consumer demand has created bottlenecks in global supply chains, pushing up prices and creating inflation.
The return of inflationary pressures is likely to last longer than expected a few months ago, with rising food and energy prices particularly affecting low-income households.
But the OECD has assured that the peak will fade as demand and output return to normal.
“The main risk, however, is that inflation continues to surprise on the upside, forcing major central banks to tighten monetary policy sooner and more than expected,” the OECD said.
Against this backdrop, the best thing central banks can do is wait for supply tensions to ease and signal that they will act if necessary, the organization said.
In the United States, the OECD predicted that the world’s largest economy would grow 5.6% this year, 3.7% in 2022 and 2.4% in 2023, down from previous projections of 6 , 0% in 2021 and 3.9% in 2022.
The outlook for China was also less optimistic, with a growth forecast of 8.1% in 2021 and 5.1% in 2022 and 2023, whereas previously the OECD expected 8.5% in 2021 and 5.8. % in 2022.
However, the outlook is slightly more optimistic for the euro area than expected with growth expected at 5.2% in 2021, 4.3% in 2022 and 2.5% in 2023 compared to previous forecasts of 5.3% in 2021 and 4.6% 2022.