The greatest energy crisis that since 1970s will cause a severely slowdown. With Europe being hardest hit, the OECD said, adding that policymakers’ first goal should be to combat inflation. The world economy should avoid going into recession next year.
Although there are many different national outlooks, the Organisation for Economic Cooperation and Development stated on Tuesday that the British economy is expect to lag behind significant peers.
Compared to the OECD’s September predictions. It predicted that global economic growth would fall from 3.1% this year to 2.2% next year before picking up again to 2.7% in 2024.
The head of the OECD, Mathias Cormann, stated at a press conference to unveil the group’s most recent Economic Outlook, “We are not expecting a recession. But we are definitely projecting a period of considerable weakening.
As per OECD, the global downturn is having an unequal impact on economies. With Europe suffering the most as a result of Russia’s conflict in Ukraine. Which is hurting commercial activity and raising energy prices.
It predicted that the GDP of the 19-member euro zone will rise by 3.3% this year, 0.5% in 2023.
And then 1.4% in 2024. This was a little better than the OECD’s forecast from September. Which predicted 3.1% growth for this year & 0.3% in 2023.
Germany, a regional powerhouse whose industry-driven economy is heavily dependent on Russian energy exports, was expect to fall by 0.3% next year, according to the OECD. Which is less dismal than the 0.7% decline forecast in September
Europe economy forecast for 2023 ?
The French economy, which is significantly less dependent upon Russian gas and oil, is predict to rise by 0.6% next year, despite varying outlooks even within Europe.
Italy was only deem to be growing by 0.2%, which suggests that numerous quarterly contractions are likely.
Outside of the euro zone. It was predicted that the British economy will contract by 0.4% in 2019 as a result of rising interest rates, soaring prices. And low confidence, the OECD had previously projected 0.2% increase.
With growth project to slow from 1.8% in this year to 0.5% in 2023 and then rise to 1.0% in 2024. The U.S. economy was expected to fare better.
The largest economy in the world was only projected to grow by 1.5% this year. While the OECD left its prediction for 2023 constant.
After a wave of COVID lockdowns, China. Which is not an OECD membe, was one of few large economies predict to see growth rise up next year.
In comparison to earlier predictions of 3.2% in 2022 and 4.7% for 2023. Growth there has been seen rising from 3.3% this year to 4.6% by 2023 and 4.1% in 2024.
Inflation was project to decline across OECD countries in more than 9% this year to 5.1% in 2024 as tighter monetary policy takes hold and pressures on energy prices relax.
To securely anchor inflation expectations, Cormann indicat that additional tightening of monetary policy was require in many emerging market nations as well as in most established ones.
Although many governments already has spent a lot of money on energy price restrictions, tax breaks, and subsidies to lessen the pain of rising inflation.
The OECD stated that the high cost indicate that such support would need to be carefully target moving forward.