The Covid-19 pandemic has left “scars” on economies, slowing the recovery in many areas. According to the Organisation for Economic Co-operation and Development (OECD), the world economic recovery is taking place with uncertainty.
Although the acceleration of vaccination against COVID-19 and the stimulus measures adopted by governments have helped spur growth, the economic outlook remains uneven.
The OECD lowered its forecast for global economic output of 5.7% growth in 2021 down 0.1% from its forecast in May.
The Asian Development Bank (ADB) also lowered this year's economic growth forecast of developing countries in Asia, according to which the growth is 7.1%, down 0.2 percentage points compared to the forecast in April.
The prospect of economic recovery is uncertain based on the slow pace of vaccination, the continued increase in the number of COVID-19 infections, and the continued lockdown measures in many areas.
There are still many gaps in economic output and employment is lagging far behind, especially for the group of emerging and developing economies with low vaccination coverage.
The growth outlook of the US was also downgraded by the OECD from 6.9% to 6% in 2021. Meanwhile, the Eurozone economy is forecast to see growth of 5.3% in 2021, higher than was forecast in May. However, each Eurozone member country also has a different growth rate.
Countries such as Argentina, Brazil, Mexico, and South Africa are forecast to have higher growth, while the economies of Australia, the UK, and Japan are expected to be slower. In Asia, progress in poverty reduction in developing economies has been delayed by at least two years due to the impact of the pandemic.
According to the ADB, the regional economy will grow in 2021 and 2022, but the prospect of recovery remains fragmented as the Delta variant rages in a number ofcountries. Countries that are doing better in epidemic control in East Asia have higher growth rates.
The outbreak of the Delta variant has reduced the momentum of the economic recovery and increased pressure on global supply chains and costs. International and financial institutions are calling on governments to remain flexible and maintain appropriate policies to support a stronger economic recovery amid the uncertain short-term economic outlook.