The global economy will avoid recession next year and European countries will be hardest hit by the worst energy crisis since 1970, according to an updated forecast from the Organization for Economic Co-operation and Development (OECD), released on Tuesday 22 november.
OECD analysts predict that global economic growth will slow from 3.1% this year to 2.2% in 2023 and then accelerate to 2.7% in 2024. “We are not expecting a recession, but we certainly foresee a period of pronounced weakening,” said Matthias Kormann, director of the OECD.
The organization pointed out that the global economic slowdown was unevenly distributed around the world and that the main blow would fall on Europe, as the Russian invasion of Ukraine affected business activity and led to a spike in oil prices. ‘energy.
OECD predicts recession in Germany and UK
The OECD predicts that the economies of the 19 eurozone countries will grow by 3.3% this year, then slow to 0.5% next year and grow by 1.4% in 2024.
The organization improved its forecast for Germany’s GDP, but still expects a recession in Germany, whose industrial-oriented economy is heavily dependent on energy imports from Russia. The German economy will contract 0.3% next year as the OECD raised its expectations from a September forecast of a 0.7% decline.
The French economy in 2023 will grow by 0.6%, the Italian by 0.2%. The OECD has lowered its forecast for the UK economy – instead of 0.2% growth, analysts now expect a 0.4% drop.
Russia faces three years of recession
For the Russian economy, OECD analysts predict three years of recession: a decline of 3.9% this year, 5.6% the next and 0.2% in 2024.
“On the monetary policy front, in most advanced economies and in many emerging markets, further tightening is needed to safely lock in inflation expectations,” Kormann warned.