(Yicai Global) March 10 -- China’s economy will expand 7.8 percent this year and 4.9 percent next year, the Organization for Economic Co-operation and Development said yesterday in its latest forecast. The 2021 projection is a 0.2 percentage point drop from its previous forecast last year, but no reasons for this adjustment were given.

The economic rebound, upturn in industrial activity and strong public health measures in Asia-Pacific countries have helped to contain the spread of the novel coronavirus and minimized its impact in many regional economies, the Paris-based grouping said in its quarterly Economic Outlook report.

On the back of a global vaccine rollout, the organization upgraded its outlook for the world economy this year by 1.4 percentage points from its previous projection in December last year to 5.5 percent. Next year, the world economy is on track to grow 4 percent, an improvement of 0.3 percentage point, it said.

“Vaccine rollout, although uneven, is gaining momentum and government stimulus, particularly in the US, is likely to provide a major boost to economic activity,” it said. “Faster and more effective vaccination deployment across the world is critical.”

The US economy is expected to grow by 6.5 percent in 2021, a 3.3 percentage points jump from the December forecast. It also raised its projection for the Euro zone and Japan by 0.3 and 0.4 percentage points respectively to 3.9 percent and 2.7 percent.

“World output is expected to reach pre-pandemic levels by mid-2021,” it said. However, some countries will lag behind and not recovery fully before the end of 2022.

The improved prospects for a sustained global recovery have been reflected in rising expectations of future inflation, particularly in the financial markets, it said. Headline inflation has recently risen in many advanced economies and remains high in some emerging-market economies, in part due to jumps in commodity prices and past currency depreciation.

A faster-than-expected recovery in demand, especially from China, coupled with a shortfall in supply, has pushed up food and metals prices considerably, and oil prices have rebounded to where they were in 2019, said OECD.

Editor: Kim Taylor