OECD economic output rebounded 9% in Q3 but remains below pre-Covid high

Resurgence follows unprecedented falls in GDP in the first half of the year

Paris in France. The third-quarter GDP resurgence was strongest in economies that experience the sharpest falls in the second quarter, such as France, the OECD said. AFP

Economic output in the Organisation for Economic Cooperation and Development (OECD) area surged 9 per cent in the third quarter of the year but still remains 4.3 per cent below the pre-pandemic high.

The rebound follows unprecedented falls in real gross domestic product in the first six months of 2020, with the third-quarter resurgence strongest in those “economies that also saw the sharpest falls in the second quarter”, the OECD said in a statement.

This was led by France, which experienced a rebound of 18.2 per cent in the third quarter following a contraction of 13.7 per cent in the previous three months. Italy saw a 16.1-per-cent third-quarter rebound in GDP following a 13-per-cent contraction while Britain surged 15.5 per cent after a decline in output of 19.8 per cent in the three months ended June 30.

Last month, the OECD said Britain's economy was at a "critical juncture" and on track for a 10-per-cent contraction this year amid the threat of a second Covid-19 lockdown and a disorderly exit from the EU.

The UK can only reach pre-crisis levels gradually amid an “exceptionally uncertain” outlook, as consumer-facing sectors remain disrupted and rising unemployment and business closures leave scars on the economy, the organisation said.

The global economy is expected to contract 4.4 per cent this year due to the economic fallout from the coronavirus pandemic, according to the International Monetary Fund. The Washington-based lender sees the world economy rebounding to 5.2 per cent in 2021.

The OECD said third-quarter GDP also rebounded in all other major economies within its remit with a 10-per-cent rise in Canada, an 8.2-per-cent increase in Germany, a 5-per-cent hike in Japan and an increase of 7.4 per cent in the US.

In the euro area and the European Union, GDP increased by 12.6 per cent and 11.6 per cent respectively, following contractions of 11.8 per cent and 11.4 per cent in the previous quarter.

However, GDP is 4.1 per cent below the levels seen a year earlier in the OECD area as a whole with the US recording the smallest annual fall of 2.9 per cent the UK the largest at 9.6 per cent.

Employment in the OECD area, which covers 37 countries across the globe, dropped to 64.6 per cent in the second quarter of this year – its lowest level since the end of 2010. The number of people in jobs fell to 560 million in the three months ended June 30, 34 million fewer than in the previous quarter.