On Wednesday, the Organization for Economic Cooperation and Development (OECD) stated that the global economy has been performing better than expected. However, it is yet on track for an unusual slump in output. An uphill revision was done in June where the estimation was there would be only a 6% fall in the GDP, but it looks like the world economy will contract by 4.5%. In a report, OECD also said that the world economy is unusually lesser than expected this year. It also remarked that the uncertainties of the Gross Domestic Product would improve in 2021 by 5%. Although, the risk prevails exceptionally unpredictable due to the pandemic.
Gravely hit sector
Travel and tourism industries – It is still grappling from the lockdown restrictions implied earlier this year and with the rise in the positive cases is not helping their case. There is an expectation of new limitations in the coming weeks, which can add pressure to the world economy.
Since re-opening of the market and businesses, the pace has not been great though it is improving, global recovery has succumbed its momentum over the past few months, said OECD.
GDP situation around the globe
In June, the forecast was that The United States, China and the euro area are going to perform better than expected.
As compared to the growth expectations in the countries like South Africa, Mexico and India have worsened.
OECD says that the country that is expected to do better is China which has seen a growth of 1.8% this year. On the contrary, the U.S. economy is set to weaken by 3.8%, including the euro area by 7.9%.
The survey is too dire for the UK, South Africa, Mexico, India, and Argentina, which are all conjectured to fall further by 10%.