China, the world’s second largest economy, is set to grow 8.5 percent this year before declining to 5.8 percent in 2022. When asked about the repercussions of the possible collapse of the debt-laden real estate giant Evergrande, Boone said the Chinese agency should deal With all the repercussions.
And despite the horrific volcanic eruption in India’s delta region this year, the economy is expected to remain broadly on track, growing at 9.7 percent, before declining to 7.9 percent next year.
In contrast, countries with lower vaccination rates have fallen significantly behind other countries, according to the World Health Organization. In Indonesia, which has vaccinated only 16 percent of the population, the economy is expected to grow by 3.7 percent, one of the lowest rates among OECD countries. Russia, which has a vaccination rate of about 30 percent, will grow at a slower-than-expected rate of 2.7 percent.
But the strong numbers in the richer economies mask lingering problems, with the uneven recovery benefiting people.
Growth in the US is back to pre-pandemic levels, but employment is still lower than it was before the economic restrictions. In Europe, which at the height of the crisis spent billions to protect its companies and workers from mass unemployment and bankruptcy, employment has been largely maintained.
The OECD said the virus and slowdown in vaccination rates will continue to affect the smooth functioning of the global economy and hamper supply chains.
“There are some parts that haven’t left factories in the countries that have the virus,” Boone said. As a result, many companies are running out of stock and production slows down, which in turn causes prices to rise for a number of goods, but the increase should subside once supply chain bottlenecks are resolved.
Inflation will ease faster than current alarming levels if vaccination programs are accelerated.
“If we continue to vaccinate and adapt better to living with the virus, supplies will return to normal and those pressures will disappear,” said Ms. Boone. “But for that we have to vaccinate more people.”
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