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The OECD Predicts That the UK Economy Will Lose Ground Against Others

The Organisation for Economic Co-operation and Development (OECD) recently released its latest prediction for how different economies around the world will recover from the current crisis. Among the bad news is the fact the UK is behind only Argentina in terms of the negative effect to be felt.

The Full Details of Their Report

It is expected that the global economy overall will make up for the ground lost in 2020 by the end of 2021. Yet, the UK is right at the tail end of the list of countries, with its economy 6.4% smaller than it had been at the end of 2019.

The only country to be in a worse position is likely to be Argentina. The South American giant has suffered a horrendous year and it is thought that their economy will have shrunk by 9.7% by the time 2021 draws to a close.

These numbers only relate to the world’s major economies. The only countries to beat the global average are in Asia. China, South Korea and Indonesia are all expected to grow faster than the world in general. In fact, the Chinese economy could be 9.7% bigger than it was when 2019 ended.

The US will have done reasonably well to bring down the damage to their economy to just 0.1%. Meanwhile, the economy in the Eurozone is predicted to have shrunk by 3%. In the UK, the use of debt collection firms has helped a lot of businesses to continue trading while the economy has ground to a halt.

Why Is the UK So Badly Affected?

The Paris-based OECD thinks that poor decision-making has led to the UK being harder hit than just about any other major economy. They point out that the coronavirus was allowed to spread extensively in both waves so far, followed by stringent lockdowns that brought the country to a virtual standstill.

They called the economic shock that the UK suffered “very sudden”. As part of their predictions, the OECD also pointed out that the economic damage will be even greater if the virus continues to spread through the population, leading to further economic restrictions and a slower recovery.

Another issue that could complicate the recovery is Brexit. Failure to agree a free trade agreement with the EU before the end of 2020 could lead to “serious additional economic disturbances” and have a long-term effect on jobs and productivity.

Could a Vaccine Save the Day?

One ray of hope comes from the idea that a vaccine could boost the recovery. The OECD report suggests that there is the “prospect of a better economic prognosis” on the basis of a vaccine being authorised and distributed to the most important sectors quickly.

It was also noted that the British government has spent more money in supporting businesses and individuals than most other countries. Laurence Boone is the chief economist at the OECD and he said that the most generous measures didn’t always come with the best results, as the measures haven’t all been “used wisely”.