Economic Buzz: World Economy Will Take Bigger Hit Than Forecast Earlier Says OECD

26 Sep 2022 , 03:35 PM

The world economy will take a bigger hit than previously forecast next year due to the effects of Russias war in Ukraine, the OECD said Monday. The organisation noted that the conflict aggravated inflationary pressure when the cost of living was already rising quickly. A number of indicators have taken a turn for the worse, and the global growth outlook has darkened,” the Organisation for Economic Co-operation and Development said in the report. Global growth stalled in the second quarter of this year and data in many economies “now point to an extended period of subdued growth”, the OECD said. The organisation slashed its 2023 growth forecast for the global economy to 2.2 percent, down from 2.8 percent in its previous estimate in June. The outlook for nearly all nations in the Group of 20 top economies was cut, except for Turkey, Indonesia and Britain, though the latter is forecast to have zero growth. Growth in the United States is forecast to slow to 0.5 percent in 2023. The growth forecast for China was cut sharply for this year to 3.2 percent while it was slightly lower to 4.7 percent for 2023. Germany is now expected to go into recession next year with Europes biggest economy now seen shrinking by 0.7 percent — a 2.4-percentage-point drop from the previous forecast. The eurozone as a whole will post meagre growth of 0.3 percent, a sharp downgrade from 1.6 percent. The OECD kept its 2022 global growth forecast unchanged at three percent after previously lowering it. OECD said global output in 2023 is now projected to be $2.8 trillion lower than previously estimated before the conflict in December 2021.Powered by Commodity Insights