by Leigh Thomas
PARIS (Reuters) – Global growth slowed more than expected a few months ago after Russia’s invasion of Ukraine as energy and inflation crises snowballed The risk of major economies slipping into recession, the OECD said on Monday.
While global growth is still expected to be 3.0% this year, it is now expected to slow to 2.2%, down from 2.8% forecast in June, Economic Cooperation and Development organization said.
Paris-based policy forum is particularly pessimistic about Europe’s prospects – it’s the most immediate
Global output next year is now expected to be higher than before Russia attacked Ukraine OECD forecast $2.8 trillion lower – global revenue loss equal to
“The global economy has lost momentum after Russia’s unprovoked, unreasonable, and illegal war of aggression.” OECD Secretary-General Mathias Cormann said in a statement that GDP growth has stagnated in many economies and economic indicators point to a further slowdown.
The OECD expects the Eurozone economic growth to grow from 3.1% this year 19 to just 0.3% y/y, which means 19 The National Shared Currency Group will be in recession for at least part of the year, defined as two consecutive quarters of contraction.
This marks a sharp downgrade in the OECD’s last economic outlook in June , when it forecast the euro zone economy to grow by 1.6% next year.
The OECD is particularly pessimistic about Germany’s economy, which is dependent on Russian gas, and expects the German economy to contract by 0.7% next year, down from the June forecast 1.7% growth.
The OECD warns that further disruptions to the economy will hit growth and boost inflation, especially in Europe, where they could reduce activity by another 1.25 percentage points and boosted inflation by 1.5 percentage points, putting many countries in recession for the entire year 2023.
“Big Most major economies need to continue to tighten monetary policy to keep inflation in check for a long time,” Coleman said at a news conference, adding that the government’s targeted fiscal stimulus was also key to restoring consumer and business confidence.
“It is critical that monetary and fiscal policy go hand in hand,” he said.
Although reliance on imported energy is much lower than in Europe, as the Fed raises interest rates to control Inflation, the U.S. is thought to be slipping into recession.
The OECD forecasts growth in the world’s largest economy to slow from 1.5% this year to just 0.5% next year, down from June 2022 and forecasts of 2.5% and 1.2%.
At the same time, China has made a means its economy will grow by just 3.2% this year and 4.7% next year, compared with the OECD’s previous forecasts of 2022 and 2023 grew by 4.4% and 4.9% respectively.
Despite the rapidly deteriorating outlook for major economies, But the OECD has said further rate hikes are needed to fight inflation, with most major central banks expected to set policy rates above 4% next year.
With many governments increasing support packages to help households and businesses cope with high inflation, the OECD said such measures should target those most in need and be temporary to reduce costs, while Not further aggravating the high post-pandemic debt.