The Day at a Glance | May 31 2021

The Top

• OECD revised its growth estimates due to the progress made with global vaccine programs and fiscal stimuli in the US.

• Agreement to implement a minimum corporate tax at a global level could come in October: OECD.

• Activity among Chinese factories slowed down slightly during May; they absorbed part of the increase in raw material costs.

• Republican Senator Shelley Moor Capito says optimistic on reaching infrastructure deal with Biden.

• Economic indicators: Inflation in Germany increased 2.4% in May (vs 2.5% e.)

Economic environment

The Organization for Economic Cooperation and Development (OECD) revised its 2021 and 2022 growth estimates. The OECD expects a 5.8% rate of growth in 2021 and 4.4% in 2022, above its previous estimates (5.6% and 4%, respectively). The organization assured that the global economy finds itself in a trend of firm recovery as activity is returning to pre-pandemic levels. However, it reiterated that the recovery is differentiated and will depend on the efficiency of vaccine programs and health policies carried out in each country. Income per capita in South Korea and the US is already at its pre-pandemic levels; while for a large part of Europe, this could take 3 years to occur – and in other countries such as Mexico or South Africa, it could take up to 5 years. The best performing countries are those that have been able to successfully implement vaccine programs and policies that protect businesses and families; advanced economies, mostly. Developing and low-income economies are lagging behind and are the main reason why global GDP will remain far from its previous growth trend seen before the pandemic. The organization is also worried about the fact that the world will continue to be vulnerable to new variants of the virus and possible quarantines as long as the entire global population is not vaccinated. For Mexico, a 5% rate of growth is expected to occur in 2021; and 3.2% in 2022, mainly boosted by foreign demand.