The global economy should avoid a recession next year but the worst energy crisis since the 1970s will trigger a sharp slowdown with Europe hit hardest, the OECD said on Tuesday, urging central banks to keep hiking interest rates.
World economic growth is set to slow from 3.1% this year to 2.2% next year before accelerating to 2.7% in 2024, the Organisation for Economic Cooperation and Development said, marginally raising its 2022 forecast.
“Our central scenario is not a global recession, but a significant growth slowdown for the world economy in 2023, as well as still high, albeit declining, inflation in many countries,” acting OECD chief economist Alvaro Santos Pereira said in the organisation’s latest Economic Outlook.
The OECD said the global slowdown was hitting economies unevenly, with Europe bearing the brunt as Russia’s war in Ukraine both hits business activity and drives an energy price spike.
