Growth began to decline – Newspaper Kommersant No. 178 (7379) of 09/27/2022

The conflict in Ukraine and the acceleration of global inflation will lead to a slowdown in the global economic growth rate in 2023 to 2.2% after 3% in 2022, according to the updated OECD macro forecast. Although the organization’s experts left the overall forecast for this year unchanged, growth estimates for the United States and China, as well as individual countries in the euro area, have been lowered. The downturn in the Russian economy, the OECD agrees with Russian government forecasters, will be less pronounced than previously expected, but longer: the decline in GDP next year could be 4.5% after 5.5% this year.

Global economic growth will slow down from 3% in 2022 to 2.2% in 2023, believes OECD. Among the main reasons are the events in Ukraine and the widespread rise in prices. The forecast for this year was left unchanged compared to the June estimate, for the next one it was lowered by 0.6 percentage points (p.p.). Total global revenues in 2023 could be $2.8 trillion lower than expected a year ago (equivalent to 2% of global GDP at purchasing power parity).

G20 growth is projected to slow to 2.8% this year from 6.2% last year and 2.2% next year. The slowdown will be most pronounced in the US, China and some European countries. AT USA GDP growth this year will be 1.5% against 5.7% a year earlier (the forecast was immediately reduced by 1 percentage point), next year GDP may grow by only 0.5% (minus 0.7 percentage points). compared to June).

Growth in China this year, against the backdrop of covid restrictions and a downturn in the real estate market, will decrease to 3.2% (from 8.1% last year, the forecast is reduced by 1.2 p.p.), but an increase in state support may help restore growth next year year to 4.7% (minus 0.2 percentage points).

For Russia the OECD expects the economy to shrink by 5.5% this year (the forecast is improved by 4.5 percentage points) and by 4.5% next (the estimate is worsened by 0.4 percentage points).

Growth rates will remain high in India, Indonesia and Saudi Arabia.

By country zones Euro the forecast for this year has been improved by 0.5 percentage points to 3.1%, next year it is expected to grow by only 0.3% (minus 1.3 percentage points). But some European countries may face a drop in output during the winter months, the OECD warns. In Germany, this year’s growth of 1.2% of GDP could be followed by a decline of 0.7%. In France, Italy and Spain, growth will slow down but remain positive. More pronounced restrictions on energy supplies, including gas, however, could reduce European growth by an additional 1.25 percentage points next year, with inflation rising by more than 1.5 percentage points, as well as decrease in the global forecast by 0.5 percentage points, the organization believes.

At the same time, the OECD expects inflation in the G20 countries to accelerate to 8.2% in 2022 from 3.8% last year and slow down to 6.5% in 2023.

In the developed countries of the G20, inflation could reach 6.2% this year and 4% next year. Tightening monetary policy and addressing supply issues are expected to ease pressure on prices next year, but higher energy costs and rising wages will hold back this process.

Most developed countries will need further rate hikes to fight inflation and lower long-term expectations, according to the OECD. Note that the ECB has already stated that “the situation with energy and food prices in the euro area will continue to deteriorate.” The head of the regulator, Christine Lagarde, speaking in the European Parliament, promised a further increase in rates “based on the results of the next few meetings.” The US Federal Reserve has already raised the rate to the range of 3-3.25% per annum and, judging by the expectations of the members of the regulator’s open markets committee, it can bring it to the level of 4.25-4.5% this year.

Tatyana Edovina