The Organisation for Economic Co-operation and Development (OECD) has upgraded its forecasts for global and British economic growth this year and next.
The OECD said the world economy is likely to expand by 5.6% in 2021. The growth figure for the UK is 5.1%, followed by growth of 4.7% next year. The significantly brighter outlook reflects the deployment of effective COVID-19 vaccines.
The report does, however, suggest a risk of lasting costs from the pandemic in some countries, including the UK.
The US will see the most improved performance of the leading developed nations, in part due to the planned $1.9 trillion (£1.4 trillion) in tax cuts and spending increases that form the centrepiece of President Joe Biden’s economic recovery plan.
The OECD said it expected the US to grow by 6.5% in 2021 and the US stimulus package to have knock-on effects for other countries as it raises global growth.
Laurence Boone, Chief Economist at the OECD, said: ‘The world economy is doing a bit better. Firms have adjusted and some countries have accelerated vaccinations and so are reopening their economies.
‘I don’t want to sound overoptimistic because a lot of the predictions are based on the assumption that vaccination will accelerate and that the race between vaccines and the virus will be won by the vaccines.’