OECD Forecasts Slowdown in Global GDP Growth

OECD Forecasts Slowdown in Global GDP Growth
The OECD expects global economy to grow by 5.6% this year.

The Organization for Economic Cooperation and Development (OECD) in its latest economic outlook published on Wednesday said the global growth has lost momentum and is becoming increasingly uneven, adding that the emergence of the new COVID-19 variant omicron could threaten economic recovery.

The 38-member organization now expects global economy to grow by 5.6% this year, down from an earlier forecast of 5.7 percent. But, it maintained its forecast of 4.5% growth in 2022.

"We are concerned that the new variant of the virus, the omicron strain, is further adding to the already high levels of uncertainty and risks, and that could be a threat to the recovery," the AFP news agency cites the OECD Chief Economist Laurence Boone as saying at a press conference.

The OECD also said supply-side constraints and shortages"should wane gradually through 2022-23" as demand normalizes, production capacity grows and more people return to the labor force.

The organization also highlighted uneven recovery of countries around the world.

"Parts of the global economy are rebounding quickly," it said, adding that "others are at risk of being left behind, particularly lower-income countries where vaccination rates are low".

The OECD is an intergovernmental economic organization with 38 member countries, founded in 1961 to stimulate economic progress and world trade. Generally, OECD members are high-income economies and are regarded as developed countries.