Building a resilient recovery

The speed and scale of the macroeconomic policy response to the COVID-19 crisis is unprecedented in peacetime.

The extensive use of direct fiscal policy tools to offset the most damaging effects of the pandemic necessarily had a marked impact on OECD-area governments’ total gross borrowing (new borrowing plus refinancing needs). Having remained stable since the 2008 financial crisis, it jumped more than 70% from USD 9.6tn in 2019 to above USD 16.4tn in 2020 – the highest increase in a single year, and nearly double the rise during the 2008 financial crisis.

While debt levels are projected to fall as economies recover, governments have sought to rebalance their sovereign debt portfolio maturities to strengthen resilience against refinancing risk.

Aid to developing countries reached record levels in 2021 as they grappled with the COVID-19 crisis, including USD 6.3bn on vaccines. Higher commodity prices in 2022 means more help will be needed.

Fake, substandard goods – including medicines, test kits, PPE and even vaccines – undermine trust and require a robust policy response to promote clean trade in the COVID-19 recovery.

The International Energy Agency proposes 10-point plan with immediate impact to reduce dependency – and actions to put long-term energy needs on a more resilient and sustainable footing.

Sixty-seven evaluations of government responses to the COVID-19 crisis provide lessons for managing risk, decision-making and communications.

USD 6.3bn of COVID-19 vaccine aid was given to developing countries in 2021 – equivalent to nearly 857 million doses. This was 3.5% of total official development assistance (ODA) from members of the OECD’s Development Assistance Committee (DAC), lifting it to an all-time high of USD 179bn, up 4.4% in real terms vs. 2020. Excluding COVID-19 vaccines, it was up 0.6%.

Challenges lie ahead. Spiking commodity prices following Russia’s invasion of Ukraine means the spectre of food insecurity looms large.

Combined with significantly higher energy prices and mounting fiscal pressures that are constraining growth, additional ODA for the hardest hit will be needed. Governments’ efforts to build a resilient economic recovery from COVID-19 just got harder.

> See news release

In 2015, UN member countries committed to 17 SDGs. However, the COVID-19 pandemic – and now the geopolitical and economic consequences of Russia’s invasion of Ukraine – have set back efforts to realise those goals.

Yet both events underline the vital importance of building the foundations for a more resilient, more sustainable global economy.

A new OECD report puts under scrutiny the many obstacles policy makers must still overcome – in particular in ensuring no one is left behind, restoring trust in institutions and limiting pressures on the natural environment.

The OECD area as a whole has met 10 of the 112 targets for which performance can be gauged and is close to achieving 18 more – while 21 targets are far from being met.

> See news release

Face masks, testing kits and COVID-19 vaccines are three products many people have become rapidly familiar with since the outbreak of the pandemic.

New OECD analysis highlights the essential role played by global supply chains in ensuring steady access to a wide range of materials and ingredients as manufacturers rapidly scaled up production to meet surging demand.