Mapping The Recovery From The Global Recession Of 2020

Out of the countries measured in OECD’s forecast, Argentina will see the biggest GDP decline in 2021. Rising unemployment and inflationary pressures have contributed to the decline.

New Zealand’s GDP loss was similar to the OECD average, despite a larger drop in mobility, from the last quarter of 2019 to the second quarter of 2020. A recovery will partially depend on travel restrictions, as tourism accounted for 20% of the country’s total employment in 2019.

A Fragile Recovery

Considerable uncertainty about near-term GDP projections remain—$7 trillion of uncertainty, to be exact.

World GDP Projections

A downside scenario would be caused by delayed vaccinations or new outbreaks, and would lead to a $4 trillion GDP loss by 2022 compared to current projections. An upside scenario, spurred by fast vaccine rollout and boosted consumer and business confidence, could add $3 trillion to the global economy.

However, it is likely that the pandemic has caused permanent losses no matter the scenario.

As we wait for vaccines to be widely available, the OECD recommends that governments implement clear COVID-19 containment measures. While debt-to-GDP ratios have risen substantially due to stimulus packages, the organization also recommends that governments maintain strong fiscal support.

In particular, policies should be directed towards the most vulnerable, such as low-skilled workers, small businesses, and children. This may foster a more even recovery from the global recession of 2020.

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