The OECD paints a portrait even darker in the economy

Photo: Valérian Mazataud The Duty
Concerned about the youth unemployment and the precarious workers, the OECD recommends that those who are in the most affected sectors, such as entertainment, are helped to be recaser in areas that are better. On our photo, the Osheaga festival 2019.

The economic damage inflicted by the pandemic of sars coronavirus will be even more severe than it was even said at the beginning of the week, predicts the OECD, including Canada. Governments will need to continue to demonstrate ” responsiveness and flexibility “.

The canadian economy will be lucky if she gets out, with a decline by a stunning 8% this year, to bounce, then, a modest 3.9 % next year, estimates the Organization for economic cooperation and development (OECD) in the latest update of its economic outlook unveiled on Wednesday. In fact, if it were necessary that she suffers a second wave of the pandemic COVID-19, the fall, this year may be rather of 9.4% and his rebounding, 2021, of only 1.5 %.

These predictions are miles away from what the OECD was predicting at the beginning of the month of march (+1.3% in 2020), as planned in the international monetary Fund (IMF) in mid-April (-6,2 %), or that were planning to even the economists of the Royal Bank on Wednesday morning (to 5.9 %).

Canada, however, is not the only one in this situation, the OECD predicts that the global economy will retract to a mind-blowing 6 % this year, or 7.6 % in the case of the second wave, compared to -3 % by the IMF in April and 5.2 % for the world Bank in the beginning of the week. The rest is up to the rider for the United States (from 7.3 per cent to -8,3 % this year), the euro area (of -9,1 % to -11,5 %), Japan (-6 % to-7.3 %) and even China, which the OECD was the first to dare to predict a contraction in the economy this year from 2.6% to 3.7 %, while the growth rate is still maintained at above 6 % last year.

9,4 %

It could be the decline of the economy this year if it had to be that it suffers a second wave of the pandemic.

Uncertainty and false dilemma

Like so many others before him, the secretary-general of the OECD, Angel Gurría, noted ” the extreme uncertainty that surrounds the current context. But one thing is certain, ” we are in the midst of the global crisis the most severe — both in terms of health, economic and social — that we have each been given to live “, he said in the press conference.

Rejecting ” the false dilemma between the defence of health or the economy “, the Mexican praised the fast action of governments when the time came to absorb the shock inflicted by their containment measures. Today, “they should take care not to remove too quickly,” he thinks, and continue rather to demonstrate ” responsiveness and flexibility “. Great care must also be put into the development of future measures of economic recoveries because ” the manner in which it will shape the world for years to come.”

The chief economist of the institution, Laurence Boone, has urged governments “not to repeat their mistake of the last financial crisis” in seeking to rebalance their budget too quickly. Their spending, she said, should in spite of everything ” be carefully targeted aid to the most vulnerable and on the investments necessary for the transition to an economy that is more resilient and sustainable.”

Particularly concerned by youth unemployment and the precarious workers, the OECD recommends, among other things, that those who are in the most affected sectors of tourism, catering, or even accommodation, are helped to be recaser in areas that are better, such as health or e-commerce.

Data | Our interactive content on the COVID-19

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Green Transition in Canada

Hit by the double shock of the containment measures and the fall in the price of natural resources, especially its oil, the canadian economy will remain, the next few months, largely dependent on the evolution of the situation in its neighbor and major partner of u.s., says the OECD.

Currently, the canadian authorities “must ensure that an emergency planning to deal with possible aftershocks of the COVID-19” while reducing the “side effects” of measures, adopted in haste, as the delivery of canadian emergency (PKU). If it ” is likely that the increase in unemployment will aggravate economic and social problems of vulnerable groups “, the shock experienced by its oil sector also offers ” the opportunity to accelerate the green transition by adopting measures that can facilitate the reallocation of resources towards the regions and sectors most affected by the decline in oil-related activity “.

“The climate emergency has not gone away. It remains the most important problem in inter-generational that we face, ” repeated Angel Gurría.

Already severely hampered by trade tensions, particularly between the United States and China, the international cooperation proved to be the main “weak point” of the response of governments during the crisis, says the OECD. But there’s nothing better to give confidence to companies and investors that see their governments agree on the most efficient and the most equitable to go forward, ” explained Laurence Boone. “Prosperity is born of dialogue and cooperation. This is true on the national level, such as at the global level. “

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