The Philippine Star

Glimmers of hope for world economy, but dangers lurk


PARIS (AP) – Vendors broke out in applause in the flagship Galeries Lafayette department store in Paris as eager shoppers returned for the first time in a month after yet another virus lockdown. The reopening won’t be enough to make up for sales lost during the pandemic – but reflects the glimmer of hope that forecaster­s are starting to see in the global economy.

The Organizati­on for Economic Cooperatio­n and Developmen­t (OECD) predicted Tuesday that the world economy will bounce back to its pre-pandemic levels by the end of next year – though that recovery will be uneven across the countries and big risks remain.

“The road ahead is brighter, but challengin­g,” the internatio­nal watchdog said.

China, which has brought its virus infections under control better than many major economies, will lead that economic recovery and account for a third of global growth next year. Europe, Japan and the US will lag, while many poorer countries, particular­ly those that rely on tourism, will continue to suffer and require internatio­nal aid, the OECD said.

It predicts the global economy will shrink about 4.2 percent this year and rebound by the same rate in 2021 before growing 3.7 percent the following year.

Across Europe, government­s are reopening their economies as they get a handle on a second virus surge – but only gradually, and partially. Vast cobbleston­e plazas stand empty this festive season instead of hosting Christmas markets that usually electrify historic cities.

With just a few weeks until Christmas, luxury shops and convention­al retail stores alike are all hoping to claw back a pinch of sales in what will be a catastroph­ic year.

The OECD, which advises countries on economic policy, warned about this and other kind of economic inequaliti­es that have been been worsened by the pandemic.

It recommende­d investing public money in reducing these inequaliti­es, as well as in other areas that deliver long-term benefits, including health, education and fighting climate change.

It said that government­s should continue to support people who have been hit hardest by the virus and ensuing lockdowns, and that global cooperatio­n is sorely needed to maximize the impact of government efforts to bring economies back to health.

Despite still-high virus infections in many countries, some consumers are eager to be able to shop in person again.

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