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World Economy to Grow 3.1% this year, OECD

The OECD predicts that the world economy would grow 3.1 percent this year. Mathias Cormann, secretary-general of OECD, said that it is true that they are not predicting a global recession. But this is a very challenging outlook, and he do not think that anyone will be in great comfort from the projection of 2.2 percent growth globally.

The OECD is made up of 38 member countries, and it works to promote prosperity and international trade, and it also issues periodic reports and analysis. According to latest figures, 18 percent of the economic output in member nations was spent on energy after Russia’s invasion of Ukraine helped drive up prices for oil and natural gas.

According to Mathias Cormann, inflation, which is mainly exacerbated by high energy prices, has become persistent, while real household incomes across most of the countries have weakened despite supportive measures that many governments have been launching.

OECD forecasts that the US Federal Reserve’s high interest rates is driving the inflation, and OECD also raised its benchmark rates by six times in 2022. In substantial increments will shrink the US economy to a near-halt.

OECD also expects that the biggest economy in the world, to grow just 1.8 percent in 2022, which has dropped from 5.9 percent in 2021, and 0.5 percent in 2023, and 1 percent in 2024. The OECD report foresees US inflation to remain well over the 2 percent annual target of US Federal Reserve next year and in 2024.