Global growth is expected to slow down in the coming year under the influence of the war waged by Russia against Ukraine, according to a new report by the Organization for Economic Cooperation and Development. “Central banks will have to continue to tighten policies in most major economies to curb inflation.”
According to the OECD report, global growth is expected to slow to 2.2 percent in 2023, compared to 2.8 percent in the forecast published in June. It was also reported that the global output next year is expected to be $2.8 trillion lower than the OECD forecast before the war .
“The global economy has lost momentum following Russia’s unjustified and illegal war against Ukraine. GDP growth has stalled in many economies and economic indicators point to a prolonged slowdown,” said OECD Secretary General Matthias Korman.
As for Europe, which is more exposed than other regions to the effects of Russia’s war in Ukraine, the OECD estimates that economic growth in the Eurozone will slow from 3.1 percent this year to only 0.3 percent in 2023. According to the earlier forecast, the Eurozone economy was supposed to grow by 1.6 percent next year.
According to the report, further disruptions in energy supply will harm growth and increase inflation, especially in Europe, where they may reduce economic activity by another 1.25 percent and increase inflation by 1.5 percent, with the result potentially being a recession that will continue throughout 2023.
The secretary general of the organization said in a press conference that “central banks will have to continue to tighten monetary policy in most major economies in order to curb inflation in a lasting way.”