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The most recent report from the Organization for Economic Cooperation and Development (OECD) timidly improved its growth prospects for 2022 and 2023, although it warned that there will be a sharp slowdown, especially in Europe.
The so-called “rich countries club” delivered a new economic outlook report this Tuesday, November 22, this time with bittersweet flavors: although it is confident that there will be no global recession in 2023, it does envision a significant slowdown compared to the solid 5, 9% achieved in 2021.
The OECD forecast that, hampered by high interest rates, inflation and Russia’s war on Ukraine, global economic growth would slow from 3.1% this year, slightly more than forecast in its September projections, to 2.2% next year, before accelerating to 2.7% in 2024.
“We are not forecasting a recession, but we are certainly forecasting a period of pronounced weakness,” OECD chief Mathias Cormann told a news conference.
The 38-nation bloc believes the global slowdown will hit economies unevenly, with Europe hardest hit as Russia’s war in Ukraine hits trade activity and causes energy prices to rise.
In view of the complex panorama, the OECD considers it prudent for central banks to continue raising their interest rates, as a way of slowing down consumption and helping to lower the prices of the family basket.
The International Monetary Fund has also been in favor of raising rates, but not the World Bank, which believes that policy makers should shift the focus to increasing production, rather than reducing consumption.
With Reuters, AP and EFE
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