Economic Buzz: OPEC Sees Global Economy Expanding By 4.2% In 2022, Says Outlook Highly Uncertain

16 Mar 2022 , 12:21 PM

OPEC noted in a monthly update that the conflict in Eastern Europe has added more downside risk to the performance of world economy in 2022. So far, and in addition to the ongoing pandemic, the conflict has led to a number of key issues including rising commodity prices, which are further escalating global inflation. The effects of the conflict, especially the impact of rising inflation, if sustained, will lead to a decline in consumption and investments to varying degrees. Moreover, financial conditions of the various asset classes, such as in currency markets, equities and an ongoing repricing of debt are being impacted. Clearly, this will impact economic activities in 2022, though to what exactly extent remains to be seen.

Given the complexity of the situation, the speed of developments, and fluidity of the market, with so far limited data to understand the far-reaching consequences of this conflict, projections are changing almost on a daily basis, making it challenging to pin down numbers, with reasonable degree of certainty. However, with more data and hence a deeper understanding of the unravelling events, over the next few weeks, the global GDP growth forecast for 2022 remains under assessment at 4.2%, and will be reviewed and adjusted, when there is more clarity on the far-reaching impact of the geopolitical turmoil.

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