China is only G20 country expected to see positive economic output this year, OECD says
- Organisation for Economic Cooperation and Development revises up its forecast for Chinese growth this year to 1.8 per cent, from a 3.7 per cent contraction projected in June
- Rapid control of the coronavirus outbreak allowed China to reopen businesses faster than other countries, but spending on services still remains subdued, the group says
The rapid speed with which China tackled the coronavirus outbreak domestically allowed for the timely easing of strict confinement measures and the reopening of businesses, helping the Chinese economy rebound more quickly than originally expected, according to the latest forecast by the Organisation for Economic Cooperation and Development (OECD).
While a gradual recovery of the global economy is projected to continue for the next 18 months, the pace will vary from nation to nation, with a significant upwards revision to the growth outlook for China.
The intergovernmental economic organisation predicted that China’s economy will expand by 1.8 per cent in 2020, and 8 per cent in 2021. The group attributed this to a better-than-expected recovery, with activity returning quickly to pre-pandemic levels by the end of the second quarter, fuelled by strong infrastructure investment.
That is a significant upwards revision from its June’s projection that the Chinese economy would contract by 3.7 per cent this year and grow by 4.5 per cent in 2021.
“China is the only G20 country in which output is projected to rise in 2020,” OECD chief economist Laurence Boone said, referring to the organisation of finance ministers and central bank governors from 19 individual countries and the European Union. He pointed to China’s “rapid control of the virus and the policy support provided to enable a quick rebound in activity”.
Gross output is the measure of total economic activity in the production of new goods and services. It is a much broader measure of the economy than gross domestic product (GDP).