Many of Europe’s economies are expected to take nearly three years to recover to pre-pandemic levels, despite global prospects improving as countries open up and roll out vaccination programmes.
That’s according to the Organization for Economic Cooperation and Development (OECD) and its annual economic outlook.
The organisation says the global economic rebound has picked up speed following the disastrous period in the wake of the COVID-19 pandemic.
OECD chief economist Laurence Boone said that economic prospects “have improved considerably in recent months.”
This is due to relief and stimulus measures in the more developed world, the report said.
It forecast that global output would rise 5.8%, raising its forecast from 4.8% during its previous outlook in December.
This year's predicted rebound follows last year's contraction of 3.5%, and would be the fastest since 1973.
But although the OECD said that most of the world would reach pre-pandemic levels of output by the end of 2022, it cautioned that “this is far from enough.”
The Paris-based organization listed several threats to the recovery, including lack of vaccines in poorer countries that have fewer resources for relief efforts. “A renewed virus-driven weakening of growth would be harder to cushion, resulting in further increases in acute poverty" and raising the risk of financial crisis, the OECD said in its forecast report.
“This is all the more troubling because, notwithstanding the impact on lives and livelihoods, the global economic and social cost of maintaining closed borders dwarfs the costs of making vaccines, tests and health supplies more widely available to these countries.”
As long as the vast majority of the global population is not vaccinated, the report said, “all of us remain vulnerable to the emergence of new variants.”
While some countries have already managed to surpass their pre-pandemic economic levels, such as China, the Euro area and the UK faces a reduced output in 2021 and 2022 compared to estimates made by the OECD in November 2019.
According to its figures, the OECD predicts the Euro area and the UK will both still be more than a percentage point behind its pre-pandemic prediction for the end of 2022.