OECD: U.S. economy to speed up to 6.9% in 2021, but inflation bites
UPDATED 8:10 AM PT – Tuesday, June 1, 2021
An international economics monitor projected U.S. GDP growth to gain momentum in coming months. The Organisation for Economic Co-operation and Development shared insight on the post-pandemic economic outlook and warned of several anticipated issues.
During their ministerial council meeting on Monday, OECD Secretary General Angel Gurria reported the global economy was heading toward a level of growth that would have been unthinkable when the pandemic began.
“In a few countries including the United States,” Gurria explained. “We now see the level of GDP at the end of 2022 being higher than the one we had projected before the pandemic struck.”
The latest @OECD #EconomicOutlook sees global output rising in 2021 by 5.8% and in 2022 by 4.4%. Progress in the rollout of vaccinations, as well as government support to people & companies remain paramount for the recovery to take hold pic.twitter.com/nA04Qd1Lsa
— Angel Gurría (@A_Gurria) May 31, 2021
The OECD 2021 economic outlook report predicts the American economy will grow 6.9 percent this year. Joe Biden’s spending plans and money printing by the Federal Reserve will be the driving factors behind this growth. However, investors are concerned elevated inflation could rise up to 5 percent and, as a result, erase the benefits of this growth for American households.
Despite their apparent support for the big spending plans proposed by the Biden administration, the OECD warned about the dangers that rising levels of national debt could create across the advanced economies this year. Economists are also expecting the economic growth to plateau in 2022, while the risks of inflation and currency devaluations may pose the threat of stagflation.