Uneven Global Economic Recovery Hinges on Vaccine Access

As the global economy slowly emerges from the COVID-19 crisis, the pace of recovery remains uneven, with advanced economies such as Canada experiencing a resurgence, while low-income and developing countries continue to struggle with unequal access to vaccines and health supplies. According to the Organization for Economic Co-operation and Development (OECD), the best economic policy is to vaccinate, and the rapid acceleration of vaccine production and distribution is crucial for bridging the recovery gap between developed and developing nations.

Key Takeaways:

• The OECD forecasts world real gross domestic product to grow 5.8 per cent in 2021, up from 4.2 per cent in its last full outlook report in December, before vaccines began their global rollout.
• Canada is expected to experience a significant upgrade in its GDP growth, with a forecast of 6.1 per cent in 2021, far ahead of the 4.7 per cent projected in March, driven by "buoyant external demand" from the United States.
• The unequal access to vaccines and other health supplies poses a significant threat to a full and equitable recovery, with the potential to widen inequality gaps between developed and developing countries.
• The World Health Organization's ACT-Accelerator program is nearly $20 billion short of the necessary funds to provide COVID-19 vaccines, protective equipment, diagnostic tests, and treatments to less-developed countries.
• Advanced economies may emerge from the pandemic with an appetite to domesticate their supply sources, which could hurt the recovery of developing countries that have benefited from the diversification and globalization of supply chains.
• The OECD's chief economist, Laurence Boone, stresses the importance of participation in the global supply chain for developing-world recovery and cautions against complacency about inflation signals.

Statistics:

• The OECD forecasts world real gross domestic product to grow 5.8 per cent in 2021.
• Canada is expected to experience a GDP growth of 6.1 per cent in 2021.
• The World Health Organization estimates the ACT-Accelerator program is nearly $20 billion short of the necessary funds for this year.
• Over half of global vaccine production capacity available for the second half of 2021 represents vaccines that haven't yet been approved.

Sources:

• Laurence Boone, chief economist, Organization for Economic Co-operation and Development (OECD), interview with The Globe and Mail.
• OECD, Global Economic Outlook 2021.
• UNICEF, Data on global vaccine production capacity.
• World Health Organization, ACT-Accelerator program funding requirements.