Prior to Russia's war of aggression against Ukraine, the global recovery from the pandemic was expected to continue in 2022 and 2023, helped by progress with global vaccination efforts, supportive macro-economic policies in the major economies, and favourable financial conditions.
Russia's war against Ukraine is however hindering global growth and aggravating inflationary pressures, creating a new negative supply shock for the world economy, just when some of the supply-chain challenges appeared to be fading.
Governments will need to cushion the blow of higher energy prices, diversify energy sources and increase efficiency wherever possible.
The tightening of monetary policy is working its way through economies. Alongside the rapid increase of policy rates, interest rates for new corporate loans and new mortgage loans have increased. While the rising borrowing costs are painful for households and firms, dampening households’ and firms’ demand through higher borrowing costs is a standard channel through which monetary policy normally takes effect.
Monetary policy needs to remain restrictive until there are clear signs that underlying inflation pressures have durably abated. Policy interest rates appear to be at or close to a peak in most economies, including the United States and the euro area, with policy judgements more finely balanced as the effects of higher interest rates become visible.
In low-paying occupations, one in ten jobs was destroyed across OECD countries. The employment recovery of low-paid workers has been slow in many countries, and recent high inflation has eroded real wages.
Having a job is often not enough to avoid poverty: on average across OECD countries, 8% of individuals living in households with at least one worker were poor. In fact the majority (68%) of all working-age people in poverty are employed, making them the largest target population for anti-poverty policies in all OECD countries.
The concept of a ‘living wage’ – a wage that allows employees and their dependants to reach a basic but decent standard of living – has resurged in recent years as a lever to meet a worker’s basic needs and to acknowledge that they are “part of a prospering society, not just a tool for its creation”.
Less a legal instrument, like minimum wage, the living wage is seen as one of the elements that may inform wage negotiations and motivate companies’ efforts to behave more responsibly.
A growing number of businesses – especially those relying on suppliers operating in developing countries – have put in place voluntary programmes to provide a living wage to their workers, and these commitments have become an important piece of corporate Human Rights policies, as recognised by the OECD Due Diligence Guidelines.
Fiscal responses to the COVID-19 pandemic drove record levels of debt issuance in the OECD area in 2020, with gross sovereign borrowing requirements peaking at USD 15.4 trillion.
While borrowing slightly moderated during 2021-2022, it is forecast to rise again in 2023 to USD 12.9 trillion, reflecting the significant debt being taken on by the countries most impacted by Russia’s war of aggression against Ukraine.
The outstanding amount of central government marketable debt in the OECD area is expected to continue its rise in 2023 to nearly USD 52 trillion— over 30% higher than 2019.
The greatest risks are faced by low-income countries as 20% of their outstanding debt is due within one year and 42% within three years. In several countries, including Zambia, Sri Lanka, and Ghana, are currently under enormous debt stress.
Looking forward, it is important that these countries continue to receive financial and technical support from international financial institutions in order to manage their debt in a transparent and prudent way.
A recent OECD study finds that anti-corruption objectives may have been deprioritised during the COVID-19 crisis. Massive business and supply-chain disruptions, combined with large increases in government spending with scant oversight, and rapid changes to the regulatory landscape not subject to established accountability mechanisms, generated many opportunities for businesses to engage in corruption.
Data from the Public Integrity Indicators show that many countries lack safeguards to prevent corruption in lobbying, political finance and conflict-of-interest situations.
Lobbying is a particularly unregulated policy area in OECD countries, leading to opportunities for undue influence over policymaking. As measured against OECD standards on lobbying, OECD countries fulfilled less than 40% of criteria regarding both regulations and practice.
Countries fare better in regulating political finance, fulfilling on average two-thirds of criteria for regulations and over half for practice. When it comes to conflict-of-interest safeguards, while many countries have strong regulatory requirements, they often fail to track submissions of interest and asset declarations, or have weak procedures in place for verifying their content.
Despite recent signs of improvement, recovery over the next two years is expected to be moderate. The outlook remains fragile and downside risks predominate. High uncertainty generated by the war could take a heavy toll on activity.
The COVID-19 crisis shows how the prioritisation of effiency has reduced the resilience of key systems to shocks. A systems approach-based resilience is proposed to prepare socioeconomic systems for future shocks.
This report reflects on the ongoing and long-term impacts of the COVID-19 crisis on MENA countries and suggests directions for policy action, knowing that MENA governments will need to set priorities due to limited public resources.
This paper provides evidence and stylised facts about labour market tightening and labour shortages since the onset of the pandemic, arguing that other factors beyond the economic cycle may also play a role.
A monthly statistical publication presenting data for a wide range of indicators for OECD countries as well as for a selection of non-member economies.
Aid for Trade was an important tool in the fight against the COVID-19 pandemic, and can help address emerging challenges. Recent data indicate that a shift is under way to harness Aid for Trade's potential to support an inclusive and sustainable recovery.
This paper considers recent trends in the financial landscape, such as pension reforms, the impact of the COVID-19 crisis and the growing digitalisation of finance, and discusses their implications for old age financial planning and financial education polices.
International markets and global supply chains played a pivotal role during the COVID-19 pandemic, by allowing countries to obtain the necessary protective goods, food and other essentials, and key components of things like tests and vaccines.
The weekly tracker of GDP growth provides a real-time indicator of economic activity using machine learning and Google Trends data.
The tracker provides estimates of year-on-year growth rates in weekly GDP. It applies a machine learning model to a panel of Google Trends data for 46 countries and aggregates, with information about search behaviour related to consumption, labour markets, housing, trade, industrial activity and economic uncertainty.
Explore key topics and broaden your knowledge of the Sustainable Development Goals (SDGs)
This inventory focuses on the global economy, pulling together analysis and data directly and indirectly related to the broad and far-reaching economic challenges arising in the context of the coronavirus (COVID-19). From productivity and income redistribution to tourism and SMEs, this collection brings together a broad range of policies to promote sustainable economic growth and build resilience for an inclusive and green recovery.