It said the global economy is still dealing with the impact of the deadly Covid-19 pandemic and growth has also been hit by high-interest rates as central banks struggle to tame inflation
Amid the ongoing war in Ukraine, the Organisation for Economic Cooperation and Development (OECD) on Monday said that the global economy is going to take a bigger hit than previously forecast next year.
The Paris-based intergovernmental organisation in a bleak report named “paying the price of war”, stated that the Ukrainian conflict triggered inflationary pressure when the cost of living was already increasing rapidly.
It said the global economy is still dealing with the impact of the deadly Covid-19 pandemic and growth has also been hit by high-interest rates as central banks struggle to tame inflation.
The report stated, “A number of indicators have taken a turn for the worse, and the global growth outlook has darkened.”
Apart from that, the economic body said that world growth was restricted in the second quarter of 2022 and data in several nations “now point to an extended period of subdued growth”.
Meanwhile, OECD downgraded its 2023 growth forecast for the global economy to 2.2 per cent from 2.8 per cent (in June).
Also, the outlook for almost every country in the Group of 20 top economies was slashed, except Indonesia and the United Kingdom and Turkey.
Growth in the United States is estimated to slow to 0.5 per cent in 2023. For this year, the growth forecast was slashed sharply for China to 3.2 per cent amid the strict Covid lockdowns.
Also, Germany is now likely to witness a recession next year as Europe’s biggest economy is now seen shrinking by 0.7 per cent due to disruptions in energy requirements
Meanwhile, few have cut India’s gross domestic product (GDP) growth forecast amid higher inflation and rising policy interest rates.
The American credit rating agency, S&P Global Ratings on Monday estimated India’s economic growth at 7.3 per cent in the current fiscal with downside risks.
In its economic outlook for Asia Pacific, the agency said that we have retained our growth outlook for India at 7.3 per cent for the fiscal year 2022-2023 and 6.5 per cent for the next fiscal year.
Earlier, the Asian Development Bank (ADB) downgraded India’s economic growth projection for 2022-23 to 7 per cent from 7.2 per cent.
Fitch also slashed India’s GDP growth forecast to 7 per cent in the financial year 2023 compared with 7.8 per cent in its earlier projection. The move came on the back of a global slowdown and tighter monetary policy.