The global economy is set to grow 4.2% in 2021, the Organization for Economic Cooperation and Development (OECD) said Tuesday.
The latest OECD economic outlook report, however, revised its global economy shrinkage forecast to 4.2%, down from 4.5% in September.
"The global economy will gain momentum over the coming two years, with global GDP at pre-pandemic levels by the end of 2021. After a sharp decline this year, global GDP is projected to rise by around 4.2% in 2021 and a further 3.7% in 2022," the report said.
It highlighted that for the first time since the pandemic began, there is hope for the future due to news of effective vaccines, but the near-term outlook remains very uncertain.
The organization warned that governments will have to continue using their policy instruments actively, with better targeting to help those hardest hit by the pandemic.
The report projected the recovery will not be equal across countries. For instance, China, which started recovering earlier, is expected to grow strongly with 8% in 2021, while OECD economies will rebound, growing 3.3%.
China is the only country among OECD members that will see growth in 2020, with 1.8%.
The contribution of Europe and North America to global growth will remain smaller than their weight in the world economy. The eurozone GDP is expected to rise 3.6%, while the US’ is set to rise 3.2% in 2021 and 3.3% in 2021.
Notably, the UK is one of the countries expected to suffer the steepest GDP drop in 2020, with 11.2%. The country is predicted to recover in 2021 with a GDP increase of 4.2%.
In the report, the contraction forecast for the Turkish economy, which was 2.9% in September, was reduced to 1.3% for this year.
The growth forecast of the Turkish economy in 2021 was also reduced to 2.9%, which was estimated 3.9% in September, while the OECD estimated Turkey will grow 3.2% in 2022.