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OECD warns about ending stimulus policy despite inflationary pressure | OECD

Major Western economic think tanks have warned the government and central banks of excessive withdrawal of support for growth, amid concerns about incomplete recovery from the pandemic recession.

The Paris-based Organization for Economic Co-operation and Development (OECD) has recently continued its stimulus package for the past 18 months. inflation It could be temporary.

Central Bank – With the US Federal Reserve Bank of England – Although beginning to raise concerns about upward pressure on living costs, the OECD said policy support remains needed unless the outlook is uncertain and employment is fully restored to pre-crisis levels.

Think tanks need to combine loose monetary policy for central banks to keep interest rates low and continue their asset purchase programs with clear guidance on whether they are ready to see inflation go ahead before taking action. Said.

NS OECD Secretary-General Matthias Corman said: However, as we have seen in the distribution of vaccines, progress is uneven. Actions in all aspects, from effective immunization programs in all countries to collaborative public investment strategies to build for the future, to ensure sustained and widespread recovery Is required. “

Think tanks said the global economy is moving at a slightly slower pace than expected in the semi-annual outlook three months ago.this is Provisional update In 2021, it recorded a 5.7% increase, down 0.1 points from previous estimates.

Five of the members of the G7, a major industrialized country, are currently projected to grow less rapidly than in May. NS UK growth forecast In the US and Germany, they were downgraded from 0.9 and 0.4 points to 6% and 2.9%, respectively, but downgraded from 7.2% to 6.7%. France’s growth forecast increased 0.5 points to 6.3%, but Italy is heading for 5.9% growth this year, up 1.4 points from three months ago.

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Inflation is expected to peak at an average of 4.5% by the end of the year in a group of 20 major economies before it eases to 3.5% by the end of 2022, boosted by the recovery of goods demand and supply chain tensions. ..

The OECD said the surge in demand following the resumption of the economy pushed up prices for key commodities such as oil, metals and food, which had a strong impact on inflation in emerging markets. Supply chain disruptions caused by pandemics have increased cost pressure while shipping costs have skyrocketed.

Lawrence Boon, Chief Economist at the OECD, said: There is a need to develop more efficient fiscal plans and shift to investing in physical and human capital, and a well-established recovery will help monetary policy to normalize smoothly. “

OECD warns about ending stimulus policy despite inflationary pressure | OECD

Source link OECD warns about ending stimulus policy despite inflationary pressure | OECD

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