- The US economy is set to grow at the fastest pace since 1984 this year, the OECD has said.
- US gross domestic product would grow 6.9% in 2021, after contracting 3.5% in 2020, it said.
- The organization said the US’ huge stimulus and speedy vaccine rollout was boosting growth.
- See more stories on Insider’s business page.
The US economy is set to grow at the fastest rate since 1984 this year thanks to government stimulus and the speedy rollout of coronavirus vaccines, the Organisation for Economic Co-operation and Development (OECD) has said.
In its latest economic outlook, the OECD group of rich countries said US gross domestic product would grow 6.9% in 2021, after contracting 3.5% in 2020. That would be the biggest increase since 1984, according to World Bank figures.
The OECD’s new US forecast was an upgrade from March’s prediction of 6.5% growth, which was itself a sharp improvement on a December estimate of 3.2%.
The successive upgrades reflect the impact of both President Joe Biden’s $1.9 trillion stimulus bill and of vaccines, which are allowing states to reopen their economies. More than half of the US population has now had at least one shot.
“Substantial additional fiscal stimulus and a rapid vaccination campaign have given a boost to the economic recovery,” the OECD analysts wrote in their report.
The authors said the recovery had picked up speed: “Indicators of consumption activity have risen, with strong household income growth and a gradual relaxation of containment measures boosting spending.”
They added: “The reopening of the economy due to widespread vaccination of the population will enable activity in more sectors to return to normal.”
The OECD is a global organization that promotes growth and trade, with 38 member countries. Its economic forecasts are closely watched.
It predicted that the global economy would grow 5.8% in 2021, up from its March forecast of 5.6%.
Yet the global recovery will be highly uneven, and the pandemic will hit some countries’ living standards hard, according to OECD chief economist Laurence Boone.
“It is with some relief that we can see the economic outlook brightening, but with some discomfort that it is doing so in a very uneven way,” she said in an introduction to the report.
“It is very disturbing that not enough vaccines are reaching emerging and low-income economies. This is exposing these economies to a fundamental threat because they have less policy capacity to support activity than advanced economies.”