OECD economic output exceeds pre-pandemic level for first time

GDP in the third quarter was 0.5% higher than in the final three months of 2019

Contractors work at the Amazon HQ2 development in Arlington, Virginia, US. GDP growth in the country exceeded its pre-pandemic level by 1.4 per cent in the third quarter. Bloomberg

Economic output in the OECD block rose above its pre-pandemic level for the first time in the third quarter, despite slower growth than in the previous three-month period.

Gross domestic product (GDP) in Organisation for Economic Co-operation and Development countries was 0.5 per cent higher in the three months to the end of September than in the pre-Covid-19 fourth quarter of 2019, driven by strong growth in the UK, Korea, Israel and some European countries, the OECD said.

However, quarter-on-quarter GDP growth slowed to 0.9 per cent in the third quarter of this year, from 1.7 per cent in the second quarter.

“All G7 countries except Japan experienced increases in GDP in the third quarter of 2021, but between Q4 2019 and Q3 2021 there was no change in GDP for the G7 countries as a whole,” the OECD said.

The US, which recorded a GDP growth rate of 0.5 per cent, down from 1.6 per cent in the previous quarter, exceeded its pre-pandemic level by 1.4 per cent, while the GDP of the other six G7 countries remained below pre-pandemic levels.

Japan was the only G7 country to report a contraction in the third quarter of the year, of minus 0.8 per cent, compared with an increase of 0.4 per cent in the previous quarter.

The OECD group of major world economies includes a number of countries in the eurozone, as well as the US, Japan and the UK.

In May, the group raised its forecast for global economic growth to 5.8 per cent in 2021, from an earlier projection of 4.2 per cent, as Covid-19 vaccination campaigns in many advanced economies improved business conditions.

In its latest report, the OECD said France recorded the strongest quarter-on-quarter GDP growth of 3 per cent, compared with 1.3 per cent in the previous quarter, followed by Italy, with growth of 2.6 per cent, slightly down on the 2.7 per cent growth seen in the second quarter.

Meanwhile, Germany and the UK saw growth of 1.8 per cent and by 1.3 per cent respectively, while Canada's output rose by 0.5 per cent from the second quarter and the eurozone economy grew 2.2 per cent.