China, the world’s second largest economy, is expected to grow by 8.5 percent this year, before declining to 5.8 percent in 2022. Asked about the impact of the potential collapse of debt-riddled real estate giant Evergrande, Ms Boone said she expects China to cope with any fallout.
And despite a dire outbreak of the Delta variant in India earlier this year, the economy was expected to remain largely on track at 9.7 percent growth, before cooling to 7.9 percent next year.
In contrast, countries with lower vaccination rates lagged far behind others, the organization said. In Indonesia, which has vaccinated only 16 percent of the population, the economy is expected to grow at 3.7 percent, one of the slowest rates among OECD countries. Russia, with a vaccination rate of around 30 percent, will grow at a slower-than-expected rate of 2.7 percent.
But the robust numbers in the richest economies masked ongoing problems, with the recovery unevenly benefiting people.
Growth in the United States has returned to prepandemic levels, but employment remains lower than before the economic restrictions. In Europe, which spent billions at the height of the crisis to protect its companies and workers against mass unemployment and bankruptcies, employment has largely been preserved.
And the virus and lagging vaccination rates continue to play a key role in the smooth functioning of the global economy, disrupting supply chains, the OECD said.
“There are some parts that have not left factories in countries with virus outbreaks,” Ms Boone said. As a result, many companies are running out of inventory and slowing production, which in turn drives up prices for a range of goods, but the increase should subside once supply chain bottlenecks disappear.
Inflation will decline faster than current alarming levels as vaccination programs accelerate.
“As we continue to vaccinate and adapt better to living with the virus, supply will begin to normalize and this pressure will decrease,” Ms Boone said. “But for that we need to vaccinate more people.”