LAST UPDATE 13:33
The OECD cut global growth estimates to 3% in 2022 from 4.5% previously, as it forecasts that growth in 2023 will slow further to 2.8%.
The revised OECD forecast is marginally lower than the World Bank estimates of 2.9% growth.
“The invasion of Ukraine, along with lockdowns in major cities and ports in China due to the coronavirus, has created a number of new shocks,” the agency said.
The war in Ukraine has made growth prospects much more bleak, although the global economy will have to avoid a period of stagnant inflation similar to that of the 1970s, the OECD said.
He estimates that it is unlikely that any immediate relief from price increases will come, with inflation expected to peak at 8.5% in 2022 in OECD countries before falling to 6% in 2023.
The OECD previously expected inflation to peak at 5% and gradually fall to 3% in 2023.
Despite lower growth and higher inflation prospects, the OECD sees a limited risk of stagnant inflation like that in the 1970s, when oil price shocks led to rising unemployment.
In particular, developed economies, which are much more driven by the services sector than they were in the 1970s, are less energy-intensive now and central banks have more freedom to fight inflation, no matter how worried about unemployment. governments.
The OECD has said it sees strong prospects for a phasing out of monetary policy incentives in high-inflation countries such as the United States and Eastern Europe.
As the pandemic boom ends, the US economy is expected to grow 2.5% this year and slow to 1.2% in 2023, lower than previous estimates of 3.7% in 2022 and 2.4%. in 2023.
The Chinese economy is expected to grow 4.4% this year and 4.9% next year, down from 5.1% previously expected in both years.
More exposed to Russian energy imports and the effects of the war in Ukraine, the eurozone economy is expected to grow 2.6% this year and 1.6% in 2023, lower than estimates for 4.3% and 2.5%, respectively. % respectively.