The UK’s growth prospects are improving, but the economic ‘scar’ of the epidemic will be worse in all G7 countries, says OECD

The Organization for Economic Co-operation and Development (OECD) has warned that the UK economy will grow faster than expected this year and next, however, it is expected to face the world’s biggest long-term economic damage. One of the seven largest industrialized nations in the wake of the epidemic.

The Organization for Economic Co-operation and Development (OECD) has significantly updated its forecast for economic growth in the UK this year and next year, from 5.1% to 7.2%, in a comprehensive assessment of the state of the world economy published every six months. 4.7% to 5.5% this year and next.

The Paris-based company said the improvements reflected in several major economies are the result of the spread of vaccines in large parts of developed countries.

But chief economist Lawrence Boone has warned that there are huge gaps between the rich world and the poor world.

“The world economy is currently heading towards recovery, with a lot of friction,” he said.

“The risk of underdevelopment after infection or its widespread distribution is high. It depends on the adoption of a flexible and consistent policy framework and the quality of international cooperation. ”

However, the OECD has also calculated the potential change in long-term growth forecasts for various economies, comparing its most recent forecast for the level of national income for 2025 with its earlier forecast for the epidemic.

This comparison gives an idea of ​​the long-term economic impact of recent events – what economists call “scars”.

Although he finds that the United States has a larger national income than previously thought – in other words, the duration of the epidemics is stronger than the cure for it – most other countries are not so lucky.

He said the UK would face the biggest scars of any G7 economy, with economic output falling by an average of 0.5% each year over the next four years.

The G7 includes the United States, Japan, Germany, the United Kingdom, France, Italy and Canada.

The OECD economic forecast points to Britain’s exit from the EU rather than COVID: “The UK is likely to experience the biggest decline among the G7 countries (down 0.5 percentage points per year), reflecting somewhat more negative side effects of the show from the post-Brexit 2021 onwards.