In its latest revision, the Organization for Economic Co-operation and Development (OECD) cut the global growth outlook for 2022, in response to the Russia-Ukraine war. The organization, however, sees limited risks of 1970s-style stagflation.
The OECD expects a world GDP growth 3.0% in 2022, 2.8% in 2023 (versus 4.5% in 2022 and 3.2% in 2023 previously reported).
Expect a growth of USA 2.5% in 2022 and 1.2% in 2023 (compared to 3.7% in 2022 and 2.4% in the previous 2023), from the Eurozone 2.6% in 2022 and 1.6% in 2023 (4.3% in 2022 and 2.5% in previous 2023), from China of 4.4% in 2022 and 4.9% in 2023 (vs. 5.1% in 2022 and 2023 prior) and that of Japan at 1.7% for 2022 and 1.8% for 2023 (3.4% and 1.1% previously).
With respect to inflationestimate it will peak in 2022 at 8.5% in the OECD as a whole, before gradually falling back to 6% in 2023.
The OECD said the removal of accommodative monetary policy is warranted around the world, but with caution in Europe, where supply-driven inflation dominates. In places like the US, where demand is being driven by buoyant demand, monetary policy can be tightened more quickly.
Source: Fx Street
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