Omicron variants warn OECD that they could threaten economic recovery

Vaccines are an economic priority. On Wednesday, the OECD urged the state to accelerate the pace of dose distribution to stop the pandemic, pointing out the “threat to economic recovery” of the Omicron variant. Lawrence Boone, chief economist at an international organization, said in a press conference that “new variants (…) could add uncertainty to what is already functioning and threaten economic recovery. I’m concerned. ” Wednesday.

Ensuring worldwide distribution of vaccines

The Organization for Economic Co-operation and Development concludes the tentative economic outlook that “it is a priority to ensure that vaccines are manufactured and distributed as quickly as possible worldwide, including booster effects.” .. “It’s a big mistake to think that work is almost done (…) The news about the Omicron variant is undoubtedly a reminder of this careless failure,” said Chief Economist.

Thus, the G20’s developed nations have spent $ 100 billion to protect their economies in times of crisis, but only $ 50 billion to vaccinate the planet, she said. The OECD’s global growth forecast has been revised to 5.6%, down 0.1 points from previous September forecasts, although the latest developments in Omicron mutants with uncertain levels of pathogenicity have not been taken into account. It has been.

Costs between 0.25 and 2% of global growth in 2022

On the other hand, next year’s activity will remain unchanged at 4.5%. According to Oxford Economics analysts, this variant will be 0.25 percentage points next year if it proves to be relatively harmless, and more than 2 points if the majority of the world’s population has to lock itself up again. May sacrifice global growth. “A significant imbalance has emerged” in the wake of this year’s economic recovery, while emphasizing the organization between developed and emerging and developing countries.

According to the agency, these gaps reflect health care system inequality, public policy, a shortage of workers in certain sectors, and “more durable than expected” inflation. For the euro area, the OECD forecasts 2021 growth to drop slightly to 5.2%. On the other hand, France’s GDP will rise 6.8% (+ 0.5 points) this year and 4.2% (+ 0.2) next year, while Italy will rise 6.3% (+ 0.4 points) and 4.6% (+ 0.5) respectively.

Changes in growth from around the world

Germany is suffering from a “major material shortage” aspect for the industry, with next year’s forecast down 0.5 points to 4.1%, but this year it will stabilize at 2.9%. The UK recovered slightly by 6.9% compared to previous forecasts, but decreased by 4.7% in 2022. As for the United States, the OECD has once again lowered expectations, this time at 5.6% this year and 3.7% next year. “Current budget support withdrawals are currently having a negative impact,” she explains.

In Asia, after experiencing a solid start this year, China “timed in the second half of this year,” said the OECD, which expects growth of 8.1% this year and 5.1% next year, 0.4 points and 0.7 points. It says it will go down. The frustration of Evergrande, a super-debt Chinese real estate developer, “weakened investment in real estate, a key provider of growth.”

Price index peak in early 2022

Regarding inflation, another major concern at the moment, the OECD predicts that the price index will peak by the end of the next quarter in the majority of developed and emerging markets before it gradually declines. .. The agency also predicts that some of the supply difficulties should be resolved by the end of the year.

The OECD requires central banks to “state clearly how much inflation above their targets is tolerated” as part of their interest rate policy. Federal Reserve Chairman Jerome Powell said Tuesday that “the risk of more sustainable inflation is increasing” and is considering a quicker cut in asset purchases, paving the way for faster-than-expected rate hikes. Said it was open.