U.S. stimulus helps lift global outlook: OECD
The U.S. and world economies are set to rebound much faster than expected. The OECD on Tuesday sharply hiked its forecasts for U.S. and global growth.
The Organization for Economic Cooperation and Development doubled its forecast for U.S. growth this year to 6.5% and raised its outlook for next year to 4.0%. It estimates the U.S.’ planned $1.9 trillion stimulus package will boost U.S. output by up to 4% on average in its first full year, creating up to 3 million jobs by year end but also increasing inflation, which is a big concern for investors now.
That relief package, it said, would also add more than a percentage point to global growth and boost the economies of its big trading partners, Canada and Mexico. The OECD said speedier COVID-19 vaccine rollouts in some countries would also give a shot in the arm to the world economy.
It significantly hiked its global growth outlook to 5.6% this year and 4.0% next year. It sees world GDP returning to pre-pandemic levels by the middle of this year.
But the OECD listed several caveats. Risks include how fast people get vaccinated, how soon restrictions are lifted, and whether new variants of the coronavirus are kept in check.
