PARIS —
World economic growth is slowing due to
decades-high inflation, the Organization for Economic Co-operation and
Development (OECD) said Tuesday, calling for “essential” further monetary
policy tightening and “more targeted” government support.
اضافة اعلان
Global GDP is set to grow 3.1 percent this year —
nearly half the rate for last year, the OECD said.
The slide is due to continue next year, with global
growth falling to 2.2 percent before rebounding “to a relatively modest 2.7
percent in 2024”, the Paris-based organization said.
Amid the effects of the war in
Ukraine, “growth has
lost momentum, high inflation is proving persistent, confidence has weakened,
and uncertainty is high”, it said in its latest forecasts.
“An end to the war and a just peace for Ukraine
would be the most impactful way to improve the global economic outlook,” OECD
secretary general Mathias Cormann said during a press conference.
OECD chief economist Alvaro Santos Pereira said in
the report that the global economy was “reeling from the largest energy crisis
since the 1970s”.
The energy shock has pushed inflation up “to levels
not seen for many decades” and is hitting economic growth around the world, he
added.
Inflation had already been on the rise before the
conflict due to bottlenecks in the global supply chain after countries emerged
from Covid lockdowns.
But the OECD said that inflation was set to reach
eight percent in the fourth quarter of this year in the Group of 20 top
economies, falling to 5.5 percent in 2023 and 2024.
Cormann said that inflationary pressure was
decreasing but urged central banks to press on with interest rates hikes.
‘Top policy priority’
“We do expect inflation to
gradually moderate as tighter monetary policy takes effect, demand and energy
price pressures diminish over time and transport costs and delivery times
continue to normalize,” he told reporters.
However, he stressed there remained the possibility
that “economic activity may become even weaker if energy prices rise further or
if energy disruptions affect gas and electricity markets in Europe and Asia.”
Fighting inflation is a “top policy priority”, the
OECD said, as soaring prices erode people’s purchasing power worldwide.
“Our central scenario is not a global recession but
a significant growth slowdown for the world economy in 2023, as well as still
high, albeit declining, inflation in many countries,” Santos Pereira said.
The OECD recommended tightening monetary policy in
countries where price rises remained high.
It also advocated targeted support for families and
firms to avoid exacerbating inflationary pressures, with energy costs “likely
to remain high and volatile for some time”.
“In these difficult and uncertain times, policy has
once again a crucial role to play: further tightening of monetary policy is
essential to fight inflation, and fiscal policy support should become more
targeted and temporary,” the OECD said.
Cormann acknowledged that government support had
helped cushion the impact of high energy costs for households and businesses.
But he said support needed to be “temporary and
better targeted”.
“This would allow to minimize fiscal costs, focus on
the most vulnerable and preserve the incentives to reduce energy consumption
and boost investment in additional supplies,” he said.
The OECD called for such aid to be better targeted,
notably in France and Germany.
Europe’s biggest economy is expected to grow by just
1.8 percent this year, while for France, the OECD forecasts growth of 2.6
percent.
And in Britain, after the economic havoc under
short-lived ex-prime minister Liz Truss, the OECD called on her successor Rishi
Sunak’s government to ensure future budgetary targets were well defined and
transparent to reduce concern about debt sustainability.
The 38-member group called for an acceleration in
investment in adopting and developing clean energy sources and technology to
help diversify supply.
Gas and oil deliveries from major producer Russia
have been severely disrupted following its invasion of Ukraine. Western allies
sanctioned its energy exports and Russia slashed supplies in the stand-off over
the conflict.
The upheaval has sent energy costs spiraling and fueled
decades-high inflation in major economies, leading central banks to hike
interest rates in a bid to tame runaway prices.
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