Organization for Economic Cooperation and Development Releases Interim Outlook Report on Global EconomyThe Organization for Economic Cooperation and Development (OECD) released its interim outlook on the global economy on September 16. The report is based on capital-centred economics and gives full credence to pay-the-rich measures by neo-liberal governments, such as the Trudeau government in Canada, despite the experience of working people that such measures do not put the well-being of those who produce the wealth in first place. Consequently, the OECD report promotes the outlook that public health and safety measures come at the cost of economic performance and vice versa, that a balance between the two must be found, and private interests are then promoted as essential to any recovery, not the human factor/social consciousness brought forward by working people. The OECD states that the global gross domestic product will shrink by 4.5 per cent this year before rebounding by five per cent in 2021. These projections represent an improvement of 1.5 percentage points for 2020 and a cut of 0.2 percentage points for next year, compared with the OECD's last estimates in June. "The forecasts are less negative [...] due primarily to better than expected outcomes for China and the United States in the first half of this year and a response by governments on a massive scale," the OECD said. The easing of containment measures and the initial re-opening of businesses had also contributed to faster recovery, it added, noting that new restrictions being imposed in some countries to tackle the resurgence of the virus would likely slow the growth pace. The OECD states, "All G20 countries with the exception of China will have suffered recession in 2020. Although a fragile recovery is expected next year, in many countries output at the end of 2021 will still be below levels at the end of 2019, and well below what was projected prior to the pandemic." In its outlook, the OECD projected 1.8 per cent growth in China this year. The OECD considers the United States to be performing better than its predictions, with a 3.8 per cent contraction in 2020, versus the previous estimate of 7.3 per cent. However, "prospects for an inclusive, resilient and sustainable economic growth will depend on a range of factors including the likelihood of new outbreaks of the virus, how well individuals observe health measures and restrictions, consumer and business confidence, and the extent to which government support to maintain jobs and help businesses succeeds in boosting demand," the OECD stated in the report. The OECD warned, however, that "a stronger resurgence of the virus, or more stringent lockdowns could cut two to three percentage points from global growth in 2021, with even higher unemployment and a prolonged period of weak investment." As concerns Canada, the OECD report states, "Annual output is projected to shrink by 9.4 per cent in 2020 in the event of a second virus outbreak and related shutdown, and by eight per cent if recovery is uninterrupted. The rebound will not be dynamic enough for output to attain pre-COVID-19 levels by the end of 2021 under either scenario. Similarly, the rate of unemployment will still be elevated. Fiscal balances will deteriorate sharply from additional spending commitments and tax-revenue losses and then recover somewhat thanks to declining outlays in support payments and recovering incomes. Weak demand will push down consumer price inflation." Amid high uncertainty and acceleration of economic activities in different patterns across the countries, the OECD called on governments to act more to help build confidence by providing flexible and more targeted fiscal, financial and other policy support. "It is important that governments avoid the mistake of tightening fiscal policy too quickly, as happened after the last financial crisis," said OECD Chief Economist Laurence Boone. "Policymakers have the opportunity of a lifetime to implement truly sustainable recovery plans that reboot the economy and generate investment in the digital upgrades much needed by small and medium-sized companies, as well as in green infrastructure, transport and housing to build back a better and greener economy," she added. (oecd.org)
This article was published in Article Link:   Website: www.cpcml.ca Email: editor@cpcml.ca |
