OECD predicts a recovery in 2021, but warns it will depend on effective distribution and cooperation between countries on the coronavirus vaccines
Vaccinations and financial support from governments will help the global economy recover to pre-pandemic levels by the end of 2021, a global economic watchdog has predicted.
But the forecast by the Organisation for Economic Cooperation and Development (OECD) also said the bounce back will be uneven in countries around the world and will depend heavily on the success of battling COVID-19.
"The contribution of Europe and North America to global growth will remain smaller than their weight in the world economy," OECD chief economist Laurence Boone said introducing a report published on Tuesday.
"China, which started recovering earlier, is projected to grow strongly, accounting for over one-third of world economic growth in 2021."
OECD secretary-general Angel Gurria said it was a sign of "hope" for the first time since the pandemic hit at the beginning of this year.
"The good news about vaccines has instilled a degree of optimism... but we are not out of the woods yet," he said.
The OECD predicts the global economy will shrink about 4.2% this year and rebound by the same rate in 2021.
It will grow by 3.7% the following year, the watchdog predicted.
But Gurria warned that "this would still leave all OECD economies smaller at the end of 2021 than they were at the end of 2019";
Many European governments have been gradually reopening their economies as virus cases come under control and the winter shopping season begins ahead of Christmas and the New Year.
Boone said the vaccine would be crucial to the turnaround: "Efficient vaccination campaigns and better co-operation between countries could accelerate the distribution of the vaccine worldwide.
"Conversely, the current resurgence of the virus in many places reminds us that governments may be forced again to tighten restrictions on economic activity."