The OECD said in its latest economic outlook, released on Tuesday, that the global economy will expand 4.2 percent in 2021, recovering from a 4.2 percent contraction projected for this year.
According to the OECD, the global economy is improving despite the second wave of the Coronavirus pandemic in a number of countries as a result of the positive news about vaccine effectiveness and China's strong economic recovery. It did not have a 2022 forecast at the time.
"We're not out of the woods".
"The road ahead is brighter, but challenging", wrote Laurence Boone, chief economist at the OECD, in the report.
The Organisation for Economic Co-operation and Development forecasts the global economy will return to pre-pandemic levels by the end of next year.
But that masked wide variations among countries, with output in many economies expected to remain about 5 percent below pre-crisis levels in 2022. In September, the OECD forecast a contraction in US GDP of 3.8% this year and growth of 4% next year.
The OECD also envisages that the general government's deficit will reach 9.4 pct of GDP this year, after a surplus of 1.5 pct in 2019, falling to 7.0 pct and 2.6 pct in 2021 and 2022, respectively. The unemployment rate is projected to reach 16.9 pct of the workforce in 2020 from 17.3 pct in 2019, rising to 17.8 pct in 2021 and falling to 17.2 pct in 2022.
China, which has brought its virus infections under control better than many major economies, will account for a big part of that economic recovery, while Europe, Japan and the USA will lag, the OECD said.
The OECD projects Japan's economy to shrink 5.3 percent this year.
The euro area economy will contract 7.5 percent this year, with many economies finishing the year in a double-dip recession after re-imposing lockdowns. Its economy will see growth return in 2021 at 3.6 percent and 3.3 percent in 2022.