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The OECD Has Improved Its GDP Forecast For Russia, China, And The United States

The OECD Has Improved Its GDP Forecast For Russia, China, And The United States

The Organization for Economic Cooperation and Development (OECD) has improved its forecast for Russia's GDP dynamics for 2020 and now expects it to fall by 7.3%, according to the organization's autumn economic forecast. In June, the OECD predicted an 8% drop in Russia's GDP if there is no second wave of coronavirus.

At the same time, the OECD in a new report has worsened the forecast for Russia's GDP for 2021 — now it expects economic growth of 5%. Although, in June, it expected that Russia's GDP would grow by 6% immediately in the absence of a second wave of the pandemic.

In 2019, Russia's GDP growth was 1.4%, the OECD notes.

In June, the organization considered two scenarios for economic development in the current and next years due to the uncertain situation with COVID-19. One suggested a second wave of the pandemic by the end of this year, and an alternative scenario in which a second outbreak could be avoided. The OECD estimated that under the second wave of COVID-19, the Russian economy would shrink by 10% in 2020 and grow by 4.9% in 2021.

China

The Organization for Economic Cooperation and Development (OECD) has improved its forecast for China's GDP dynamics for 2020 and now expects growth of 1.8%, according to the organization's autumn forecast. In June, the OECD predicted that the country's economy would shrink by 2.6% if there was no second wave of coronavirus.

The forecast for 2021 has also been improved: the OECD now expects the world's second-largest economy to grow by 8%. In June, the organization predicted that China's GDP would grow by 6.8% in the absence of a second wave.

"China experienced a sharper-than-expected recovery, and by the end of the second quarter, economic activity quickly returned to pre-pandemic levels, helped by significant infrastructure investment," the OECD wrote.

In June, due to the uncertainty surrounding the coronavirus, the OECD considered two scenarios for economic development in the current and next years: one assumed a second wave of the pandemic by the end of this year, and the alternative – that a second outbreak could be avoided. The OECD estimated that under the second wave of COVID-19, the Chinese economy will shrink by 3.7% in 2020, and grow by 4.5% in 2021.

USA

The organization for economic cooperation and development forecasts that US GDP will fall by 3.8% in 2020, while in June, the OECD expected the country's economy to shrink by 7.3% if there is no second wave of the pandemic, the organization said in its autumn economic forecast.

In 2021, the OECD is still waiting for the recovery of the US economy, but slightly worsened the forecast for GDP dynamics — now the organization expects the country's economy to grow by 4% next year against the June 4.1% (in the scenario without the second wave of the coronavirus epidemic).

Due to the uncertain situation around the coronavirus, the OECD in June considered two scenarios for economic development in the current and next years — one scenario in which a second outbreak will occur in all economies by the end of this year, and an alternative scenario in which a second outbreak will be avoided. The OECD estimated that under the second wave of COVID-19, the United States economy would shrink by 8.5% in 2020 and grow by 1.9% in 2021.

The Interim Economic Outlook projects global GDP to fall by 4½ per cent this year, before growing by 5% in 2021. The forecasts are less negative than those in OECD’s June Economic Outlook, due primarily to better than expected outcomes for China and the United States in the first half of this year and a response by governments on a massive scale. However, output in many countries at the end of 2021 will still be below the levels at the end of 2019, and well below what was projected prior to the pandemic.

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