Paris, Sep 16 (efe-epa).- The global economy is bouncing back better than expected amid the Covid crisis thanks to growth in China, the Organization for Economic Cooperation and Development said Wednesday.
It predicted a 4.5 percent drop in economic activity this year, an increase from a six percent slump forecast in June.
China was projected to be the only G20 country to see GDP growth this year with a 1.8 percent increase.
The Asian nation was quick to bring the outbreak under control after Covid-19 first emerged there last year.
These factors are estimated to see an eight percent rise in its economic activity next year, according to the OECD.
India is also expected to lead growth next year with an increase of 10.7 percent, it added.
Global GDP is expected to grow by five percent in 2021, slightly down from 5.2 percent predicted in June, according to the Paris-based organization.
This could increase by up to seven percent in 2021 with trade up by six percent if the situation improves faster than expected, the OECD said.
A deterioration in the crisis could see GDP growth decrease by between 2.5 to three percent, it added.
By 2021, the overall loss of revenue is likely to amount to $7 trillion which could decrease to $4tn in a more positive scenario or increase to $11tn if there is a resurgence of the virus.
OECD chief economist Laurence Boone said: “The world is facing an acute health crisis and the most dramatic economic slowdown since the second world war. The end is not yet in sight.”
The G20 as a whole is projected to see its economy shrink by 4.1 percent this year, a more optimistic forecast from June when it was predicted to decrease by 5.7 percent, and 5.7 percent in 2021.
The crisis has hit many G20 countries, with South Africa, Argentina, Italy and Mexico among some of the worst hit economically, according to the OECD.
Predictions have slightly improved for others since the OECD’s June report, including the United Kingdom, France, Germany and the Eurozone.
The estimation for the United States has also significantly improved with a predicted decrease of 3.8 percent compared to 7.3 percent forecast in June.
There is also expected to be moderate growth in Latin America.
The OECD warned that economic recovery has lost momentum since the summer and that fiscal, monetary and structural support policies must be maintained to preserve confidence and limit the impact of the crisis.
It said there is a delicate balance between adapting the labor market to the situation and measures to curb job losses, which had saved around 50 million jobs in its member countries by May. EFE-EPA