The world economy will slow down its expansion in 2023

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The OECD said that in the context of the war in Ukraine “growth is at half mast, high inflation is persistent, confidence has deteriorated and uncertainty is high”

The world economy will slow down ; its expansion in 2023

A sign with the price of some sausages in a supermarket in Los Angeles, California, USA

The growth of the world economy< /b> will go from 3.1% this year to 2.2% in 2023, before rebounding to 2.7% in 2024, the Organization for Economic Cooperation and Development ( OECD) in its latest forecasts.

In a context of war in Ukraine, “growth is at half mast, high inflation is persistent, confidence has deteriorated and uncertainty is high”, notes the organization based in Paris.

For your Acting Chief Economist, Alvaro Santos Pereira, “the world economy is experiencing its most serious energy crisis since the 1970s”, which triggered inflation “to unprecedented levels in several decades” and hindered growth.

The increase in prices should reach an average of 8% this year in the G20 countries, which brings together the main economies of the planet, before falling to 5.5% in 2023 and 2024, according to the OECD projections.

The most likely scenario for next year “is not a global recession, but a clear slowdown in the world economy, as well as inflation that remains high but is falling in many countries”, explains Santos Pereira.

The world economy will slow down its expansion in 2023

Alvaro Santos Pereira, OECD chief economist

Regarding Latin America, the report estimates that its main economies will performed “better than expected in 2022, especially by exporters of food and energy”, but that the rebound will lose “strength” in 2023 and 2024.

The OECD justifies it in a hardening of the situation, the withdrawal of tax aid and a reduction in the price of raw materials. Regarding inflation, it will “regress gradually” after “probably” approaching its current maximum.

The economic organization advocates continuing with a tightening of monetary policy to “fight inflation” and considers that fiscal support “should be more specific and temporary”.

“Accelerating investment to adopt and develop clean energy sources and technologies will be crucial to diversify the supply and guarantee energy security”, adds the economist.

The OECD works to boost economic growth and international trade and its 38 member countries –among them Mexico, Chile, Colombia and Costa Rica — represent 60% of world economic production.

(With information from AFP)

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