Global economy

Economic recovery remains uneven

21/09/2021 PNG

Global GDP is now higher than its pre-pandemic level. Nonetheless, even as the global economic recovery has gathered pace, by mid-2021 output remained 3.5% lower than projected before the pandemic – a real income shortfall of USD 4.5 trillion (2015 purchasing power parity). Closing this gap remains essential to minimise long-term scars from the pandemic via job and income losses.

The recovery remains uneven across countries, sectors and demographic groups. This has left countries facing vastly different policy challenges. In some countries where output has returned to pre-pandemic levels, such as the United States, employment remains lower than before the pandemic. In others, particularly in Europe, employment has been largely preserved, but output and total hours worked have not yet recovered fully.

Vaccination rates have had a direct impact on the economic recovery: countries with high vaccination rates have experienced relatively mild economic setbacks, even with the more transmissible Delta variant of COVID-19 in circulation (although there are signs the variant may dampen short-term growth). Other countries – in particular those in the Asia-Pacific region, which have lower vaccination rates – have continued to impose containment measures, which is adding pressures on global supply chains.

See: OECD Economic Outlook