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OECD Forecasts Global GDP $2.8 Trillion Lower than Pre-Ukraine War

GLOBAL
MNI (London)
  • The global economy is slowing more than expected. Global GDP is now expected to be USD 2.8 trillion lower than the pre-Ukraine war forecast.
  • The OECD is anticipating 3.0% y/y global real growth for 2022 and 2.25% for 2023 (over 1pp lower than the pre- war December forecast). Germany is expected to enter a recession in 2023, shrinking by 0.7%.
  • Slowing growth is driven by global tightening of monetary policy as inflation continues to outpace targets and expectations.
  • Risks are skewed to the downside. The Ukraine war has caused a surge in food and commodity prices, which alongside weak Chinese growth has generated uncertain and pessimistic global outlooks.
  • Disruption in energy supply and global food security risks remain elevated. Global food supply risks are worsened by the challenge of climate-change-induced extreme weather.
  • Markets are pricing increased risks to growth. Spreads have widened (notably in Europe) and a substantial risk-off environment had materialised, intensifying capital outflows from EMs.

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