OIC Economic Outlook 2021
Date: 09 November 2021

SESRIC has launched the 2021 edition of the OIC Economic Outlook, the Centre’s flagship report that explores global macroeconomic trends with the focus on the OIC countries as a group and provides a wide-range of useful statistics and analyses, including the comparison of OIC countries’ economic performance with the developed countries, the non-OIC developing countries, and the world average.

The COVID-19 pandemic caused an unprecedented global health and humanitarian crisis, which has disrupted billions of lives around the world. In addition to dramatic implications for the health of people, the pandemic has also triggered a major economic and financial downturn. The Report shows that, in 2020, most of the macroeconomic indicators deteriorated significantly all over the world, and the OIC member countries were no exception.

Following an already weakening global economic growth due to challenges predating the pandemic, the world real GDP is now estimated to have contracted by 3.2% in 2020. After this contraction, the global economy is projected to grow at 6% in 2021 with the contribution and support of fiscal stimulus, the anticipated speeding and widening of vaccination coverage, and the continued adaptation of all sectors of the economy to pandemic life. Under the pandemic conditions in 2020, the economies of OIC countries, on average, contracted moderately by the rate of 1.6%, and they are expected to recover with a growth rate of 4.3% in 2021 and 4.5% in 2022 –around the past ten-year average.

Under the unprecedented adverse effects of the pandemic, global trade volume is estimated to have decreased by 8.5% in 2020, smaller than earlier estimates due to the fast recovery in merchandise trade. In value terms, global merchandise trade declined by 7.3%. Merchandise exports of OIC countries fell even sharper, by 17% to US$ 1.49 trillion, and thus, accounted for a smaller share of the global exports; 8.6% in 2020 compared with 9.6% in 2019. While their exports to non-OIC countries shrank 18.5%, intra-OIC exports decreased to a lesser extent, by 9.5% to US$ 290 billion, which translated into an increase in the share of intra-OIC trade in total trade of OIC countries from 18.7% in 2019 to 19.5% in 2020, the highest rate achieved in the last decade.

With the pandemic wreaking havoc on labour markets worldwide, it is estimated that, relative to the fourth quarter of 2019, 8.8% of total working hours were lost in 2020. This resulted in 33 million more people becoming unemployed and the global unemployment rate rising to 6.5%, the highest level in the last three decades. In OIC countries, the number of unemployed increased by over 4 million to reach 49.3 million in 2020. Consequently, the unemployment rate bounced to 7.1% in that year from 6.4% in 2019 and remained higher than in the rest of the world.

Global FDI inflows fell by a dramatic 34.7% in 2020 to around US$ 1 trillion mainly due to the 58.3% decline in flows into developed countries as compared to the 12.1% drop in developing countries. Flows to OIC countries followed a similar course as developing countries and fell 12.5% to US$ 100 billion in 2020 compared to US$ 114 billion in 2019. Thus, the share of OIC countries in global FDI inflows rose up to 10.0%, the highest rate in the last decade.

The current edition of the Report includes a special section titled “Trade, Transport, and Tourism amidst the COVID-19 Pandemic”. This section investigates the impacts of the COVID-19 pandemic on three major sectors of the economy, international trade, transport, and tourism, with particular reference to the OIC member countries. For each of these sectors, the Report also proposes a number of policy recommendations to spearhead recovery and enhance resilience in OIC member countries.

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