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Global recession not as deep as expected in 2020: OECD

PARIS (AFP) – The global recession this year will not be as deep as expected as a result of countries’ efforts to counter the economic fallout from the coronavirus pandemic, the OECD said on Wednesday.

But the recovery next year will also be more modest than anticipated, the Organisation for Economic Co-operation and Development said, projecting a contraction of 4.5 percent in global economic output this year and a return to growth of roughly 5.0 percent in 2021.

In its previous set of forecasts in June, the Paris-based OECD had been expecting the global economy to shrink by 6.0 percent in 2020 and return to growth of 5.2 percent next year.

“After the initial bounce-back in many activities following the easing of confinement measures, there are some signs from high-frequency indicators and business surveys that the pace of the global recovery has lost momentum since June, particularly in many advanced economies,” the OECD said.

It pointed out, however, that “the economic outlook remains exceptionally uncertain, with the Covid-19 pandemic continuing to exert a substantial toll on economies and societies”.

In the second quarter of 2020, global output more than 10 percent lower than at the end of 2019, “an unprecedented sudden shock in modern times”, the OECD said.

The extent and timing of the pandemic shock differed across the major economies, but all experienced a sharp contraction in activity as necessary containment measures were implemented.

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