The industrialized nations organization OECD expects a global economic slowdown due to the war in Ukraine and sees the euro zone in particular under pressure. In its interim forecast published yesterday, Monday, the Paris-based organization estimates that global economic output will grow by three percent this year. But for the coming year, the OECD only expects growth of 2.2 percent, 0.6 percentage points less than originally forecast.
The war is not only stifling growth but also driving up inflation and energy prices, the report says. In total, global real incomes in 2023 could therefore be 2.8 trillion euros below pre-war expectations.
Europe is also severely affected by declining real incomes and disruptions in the energy markets. Here, many economies are likely to see weak growth at best in the second half of 2022 and the first quarter of 2023 before some improvement by the end of 2023, the OECD says. Short-term declines in production are likely in some countries, including Germany, Italy and Great Britain.
The industrialized nations organization predicts growth of 0.3 percent for the euro zone in the coming year, and a recession for Germany. There are no Austria figures in this forecast. In the US, growth is likely to fall back to half a percent.
Inflation will remain high in the coming year, so further interest rate hikes are necessary, according to the OECD. In any case, the uncertainties are extremely high. If there is a shortage of energy, especially gas, the economy in Europe could shrink by one percent – and inflation, which is already high, could rise another 1.5 percentage points.
Help for needy households
Government support should be focused on the neediest households, given incentives to save energy and phased out as soon as possible, recommends the OECD. At the same time, states must ensure that the switch to renewable energy sources continues in order not to let up in the fight against the climate crisis.
Source: Nachrichten
