Live News Updates: OECD Cuts Global Forecasts And Predicts Fullyear Recession In Europe

If a severe winter exacerbates energy shortages in the region, a recession that could slow global growth awaits next year, the OECD has warned.

In its semi-annual economic outlook published last Monday, the Paris-based agency projected global output growth of 3 percent in 2022 – half of what it saw in 2021 – and cut its 2023 growth forecast from 0.6 percent to 2 percent. 2 percent.

The OECD previously said it expects the global economy to slow and remain in recession following Russia's invasion of Ukraine in February.

The steep decline was driven by forecasts for the US economy, which is now expected to grow 1.5% this year – lower than the percentage predicted in June – and 0.5% in 2023.

The agency highlighted that the shortage of oil from Russia to Europe could be "worse" than expected.

EU gas reserves, even at current levels of 80-90% of capacity, may not be enough to get through a normal winter without falling to dangerously low levels, the OECD said.

The cold winter could worsen supply shortages as Russia fails to secure supplies outside the EU as expected, leading to a "significant spike" in world prices.

If the EU fails to find alternative sources of supply and systematically reduce gas demand, the shortages "could raise global energy prices, undermine confidence and financial stability and require a temporary moderation in business gas use," the OECD said. .

The combination of shocks will push European economic growth above the OECD's baseline forecast of 1.25 percent in 2023 and inflation above 1.5 percent, sending many countries into recession for a year.

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Global growth will be 0.5 percent lower and inflation 0.5 percent higher.

World Economic Outlook, April 2022.

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