The heartbeat of harsh economic forecasts continued on Wednesday Organization for Economic Co-operation and Development Russia’s invasion of Ukraine has encouraged rapid inflation and warned that it is slowing global growth.
Matthias Corman, the organization’s secretary-general, repeatedly emphasized that he “does not anticipate a recession” at this time, but acknowledged that the risks to the forecast are negative and worsen as the war prolongs.
Representing 38 countries, including most of the world’s developed world, the organization has reduced its estimates of global growth this year from the 4.5% forecast at the end of last year to 3%. The average inflation rate of the organization’s member states is estimated to be close to 9% this year, double the previous forecast.
Many of the Baltic countries are expected to get worse with double-digit inflation.
Looking at a chart detailing the growth of each country at a press conference, Chief Economist Lawrence Boon mentioned the downward “sea of red arrows.”
World Bank on Tuesday Announce your own outlookThe global growth rate for this year is projected to be slightly lower at 2.9%.
Especially in China, soaring fuel and food prices, overwhelming supply chains and Covid-related closures have exacerbated the economic crisis.
China, which has been the driving force for growth in recent decades, is now the “driving force for volatility,” Corman said.
Both he and Mr. Boon emphasized that the world produces enough oil and grain to meet global demand. According to Corman, wheat production over the last 12 months has actually increased from the previous year. Other oil-producing countries could replace Russian oil brought out of the market, Boone said. However, wars, export restrictions, production restrictions, logistics entanglements, and other factors have prevented these necessities from reaching the low-income and emerging economies most needed.
Mr. Boone said he had enough food. “The problem is getting it where you need it at an affordable price,” she added.
The economic downturn is felt most strongly in Europe. In the UK, a combination of high inflation, tax increases and central bank interest rate hikes are expected to rise 3.6% in 2022 and then zero growth next year. Europe’s largest German economy will grow at less than 2% over the next two years. Poland, which has accepted millions of Ukrainian refugees, is projected to reach 4.4. Growth rate this year, 1.8% growth next year.
In the United States, growth is expected to drop to 2.5% this year and 1.2% in 2023.
“The crisis in living costs will create difficulties and risk famine,” the report said, repeating several warnings from other international organizations. At the same time, the organization emphasized how uncertain the forecasts were, taking into account fluctuations such as wars and pandemics.
