More trouble ahead for the global economy, OECD predicts

High interest rates, soaring inflation and Russia’s war in Ukraine mean that slower growth is predicted for the global economy in the year ahead -- with only a slight recovery in 2024.

According to the Organisation for Economic Cooperation and Development (OECD), the world economy will grow just 3.1% this year, down sharply from 5.9% in 2021.

And next year is expected to be even worse: The international economy will expand be only 2.2%, says the Paris-based organisation.

The West will be particularly affected. GDP in the Euro area and growth in the US are expected to decline to 0.5%.

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OECD GDP growth forecast chart - Euronews

"The world is facing substantial headwinds and substantial risks over the horizon", explained OECD Secretary-General Mathias Cormann.

"In this challenging environment we need to confront the crisis with well-designed responses as well as with international cooperation in order to overcome this difficult situation and pave the way for a better future", he added.

Soaring high inflation is dragging on economies around the world. In the Eurozone, inflation next year is expected to drop to 6.8% from 8.3% in 2022.

The incremental drop in prices in the US may continue, with inflation falling to 3.5%. Further easing is anticipated in 2024.

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OECD inflation forecast - Euronews

"Inflationary pressures have really intensified and have become a lot more pervasive", said Alvaro Santos Pereira, Acting Chief Economist at the OECD.

"You can see that in many countries of the world you have more than 50%, 60%, 70% of all goods and services of their economies that right now are growing more than 6% per year." he said. "So, inflation has become more entrenched, more intensified, but also more broad-based".