Launch of the 2021 Economic Outlook, 31 May 2021

 

Remarks by Angel Gurría,

Secretary-General, OECD

Paris, 31 May 2021

Ministers, Ambassadors, colleagues, dear friends,

It is my pleasure to join our Chief Economist for the launch of the Economic Outlook. The Outlook is a flagship OECD report, reaching audiences and sparking debates all over the world. I am proud of it and of the work that goes into it, and always greatly enjoy having the opportunity to launch it.

When I look back over 15 years of Outlook launches, I am reminded of the major shifts and upheavals that of the global economy. has been through since I became Secretary-General. For example, over that whole period we have been living through a digital revolution which has transformed how we live and work. In 2006, only about 1 in 6 people in the world were internet users: now that is up to 3 in 5, a total of 4.7 billion people.

Another ongoing process of huge consequence has been climate change. The OECD has consistently sounded the alarm and put forward recommendations for decarbonising our economies, and even if the situation remains deeply worrying, tangible progress is being made. Most countries, including almost all OECD members, have committed to achieving net zero emissions by mid-century and at this MCM we are launching the International Programme for Action on Climate (IPAC) to help them in this endeavour.

But of course it is the big crises that come to mind. The global financial crisis in 2008, which resulted in a permanent loss in global GDP per capita of 3%.

And now, for more than a year, we find ourselves in another, even larger crisis. The ongoing COVID-19 pandemic is a health crisis on a scale not seen since the Flu of 1918. Our 2020 Spring Economic Outlook was right to predict that there could be more than one wave of the pandemic, which has raised unprecedented challenges for both health and economic policies, and has reminded us that it is futile to distinguish between the two. The best economic policy is to defeat the virus, mainly through vaccination.

Fortunately, we all learned lessons from the Global Financial Crisis and its fallout.

Central banks discovered the firepower available to them in the form of quantitative easing, and they have deployed it massively.

Governments have learned of the dangers of tightening fiscal policy prematurely as the economy begins to recover. They also learned the utility of tools such as job retention schemes, which have been widely and effectively used in this crisis.

Moreover, there has also been a greater appreciation of the distributional effects of economic crises. OECD research has shown that it is the poorest that suffer the most.

Thanks to these lessons, things have gone better than we initially feared. Output losses have been lower and unemployment has not risen as much as we projected a year ago. This is due to the unprecedented level of macroeconomic policy support some countries have deployed. Moreover, governments have taken impressive actions to support those on low incomes and mitigate the impact of the crisis on the most vulnerable.

These policies, together with the rollout of vaccines, are also reflected in our upgraded projections for future growth. We now see global output rising by close to 6 per cent in 2021 and nearly 4½ percent in 2022. In a few countries, including the United States, we now see the level of GDP at the end of 2022 being higher than we were projecting before the pandemic struck. That is a testament to the strength of the policy response.

I am heartened that many OECD members have announced plans not just to provide stimulus but also to improve the sustainability and quality of the recovery. Notably, the American Families Plan and the American Jobs Plan, as well as the Next Generation EU Plan, are important opportunities to tackle long-standing under-investment, as well as social issues facing the United States and Europe.

The Economic Outlook only takes account of measures that are already adopted, so the possible passage of measures like the American Jobs Plan is a source of upside potential to the outlook. Our ongoing work to develop a Recovery Dashboard of Indicators will help us build forward better by ensuring a strong, resilient, green and inclusive post-COVID-19 recovery.

Dear friends,

It will no doubt take time to distil all the lessons from the joint health and economic crisis from which we are just beginning to emerge, but some are taking shape. One of these is that in the face of a global shock like the COVID-19 pandemic, there is too little international cooperation. The result is that the prospects for recovery are too uneven, and that in turn may put in doubt recovery for all countries. Laurence will spell this out in more detail in her presentation. Rest assured that, as an international organisation with cooperation and development in its name, the OECD will continue to advocate loudly for multilateral approaches to quickly end the pandemic all around the world and prepare better for such events in the future.

Thank you.

 

Related Documents

 

Annual report
Discover the
OECD
download
Brochure
Read our
annual report
download