‘Corona makes economic hole as big as France’ | Financial

This is reported by the Organization for Economic Co-operation and Development (OECD). The think tank expects the global economy to grow by 5.8% this year. That is a lot higher than the 4.2% expected at the end of last year. In 2022, the expected growth of 4.4% is also strong.

This is not only due to the rapid vaccination campaign. Governments also literally contributed a lot. Especially in the United States, the government is spending a lot of money. President Joe Biden announced a package of nearly $2000 billion in investment plans just a few months ago. This brings the US pandemic expenditures to a sloppy $6000 billion.

But that growth does not mean that the crisis has not left its mark. Without corona, the global economy would have been $3 trillion larger by the end of 2022. That is as much as the entire French economy, calculated the OECD.

Dutch recovery

Moreover, recovery does not happen at the same pace everywhere. By the middle of next year, the Netherlands will be back at pre-pandemic levels, as will Greece, Italy and the United Kingdom, for example. The US and South Korea are almost there. The Spanish economy will not return to its previous level until the second half of 2022. And as long as not everyone is vaccinated, the recovery will continue at different speeds, warns the OECD.

In any case, for the time being, the economy is benefiting from the fact that households have saved more in the past year, and are now eager to spend (part of this) again.

Not only does that lead to more eating out, vacations and other services that we haven’t been able to use for so long, but also inflation. Markets have been under the spell of fears that inflation will rise for a few weeks now.

Good news for investors

The OECD has a reassuring message for them: by the end of this year the disruptions in the production chains will have been resolved and factories worldwide will be running at full strength again.

Shortages, such as the shortage of chips for the car industry and consumer electronics, should then decrease again. This means that prices are also less on the rise.

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