Hobbled by high interest rates, punishing inflation and Russia's war against Ukraine, the world economy is expected to eke out only modest growth this year and to expand even more tepidly in 2023.
Hobbled by high interest rates, punishing inflation and Russia's war against Ukraine, the world economy is expected to eke out only modest growth this year and to expand even more tepidly in 2023.
The OECD, made up of 38 member countries, works to promote international trade and prosperity and issues periodic reports and analyses. Figures from the organization showed fully 18 per cent of economic output in member countries being spent on energy after Russia’s invasion of Ukraine helped drive up prices for oil and natural gas. That has confronted the world with an energy crisis on the scale of the two historic energy price spikes in the 1970s that also slowed growth and fueled inflation.
That grim outlook is widely shared. Most economists expect the United States to enter at least a mild recession next year, though the OECD did not specifically predict one. And it expects inflation to continue squeezing the continent: The OECD predicts that consumer prices, which rose just 2.6 per cent in 2021, will jump 8.3 per cent for all of 2022 and 6.8 per cent in 2023.
Fueled by vast government spending and record-low borrowing rates, the world economy soared out of the pandemic recession of early 2020. The recovery was so strong that it overwhelmed factories, ports and freight yards, causing shortages and higher prices. Moscow's invasion of Ukraine in February disrupted trade in energy and food and further accelerated prices.
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