OECD cuts global economic outlook for 2021 amid Covid variant concerns

The Organization for Economic Cooperation and Development revised its global growth forecast for 2021 down to 5.6 per cent over concerns about the impact of coronavirus mutations on the recovery.

"The strong rebound we have seen is now easing and supply bottlenecks, rising inflation, and the continuing impact of the pandemic are clouding the horizon," OECD chief Mathias Cormann said at the presentation of an updated report.

The Paris-based organization predicted in September that the global economy would expand 5.7% this year. It left the 2022 projection unchanged at 4.5%.

The global recovery, it said, is becoming increasingly imbalanced due to uncertainty over the continued emergence of new virus variants. The World Health Organization labeled the newest mutation, Omicron, a "variant of concern" last week.

"The risks and uncertainties are large -- as is being seen with the emergence of the Omicron variant -- aggravating the imbalances and threatening the recovery," Cormann said.

The OECD said a speedier global vaccination was essential for saving lives and protecting livelihoods. It warned that pockets of low vaccination could end up as breeding grounds for deadlier strains, while more benign scenarios would see outbreaks continue stifling production for a long while.