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The OECD also expects a recession in Germany

2022-09-26T10:41:35.981Z

The world economy is suffering from the consequences of the Russian war against Ukraine. The industrialized nations organization OECD has now had to correct its economic forecasts significantly downwards.



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Container ship in Hamburg: In 2023, the economy is likely to shrink by 0.7 percent

Photo: Christian Charisius/ dpa

The industrialized nations organization OECD forecasts an ever weaker development of the global economy due to the consequences of the Russian war of aggression in Ukraine.

Germany is said to be one of the most affected countries.

According to the experts, the economy here could shrink by 0.7 percent in 2023.

That is 2.4 percentage points less than the OECD had forecast in June.

Other countries are also likely to struggle with a shaky economy.

In China, for example, growth has suffered a serious setback and is expected to drop to 3.2 percent in 2022.

Apart from the 2020 pandemic phase, this is the lowest growth rate in China since the 1970s.

"The global economy lost momentum this year," the organization said.

The global economy is likely to grow by 3.0 percent this year, but only by 2.2 percent in 2023.

The situation could worsen if the winter were particularly cold or if the energy shortage became even worse.

For comparison: in 2021 there was still a strong increase of 5.8 percent worldwide due to the recovery from the corona pandemic.

The experts predict that inflation will also remain “very high”.

Inflation at the level of the 1980s

"The war has pushed up energy prices, particularly in Europe," says the OECD report.

This has increased inflationary pressures at a time when the cost of living has already risen sharply.

In many national economies, companies simply pass on their higher energy, transport and personnel costs to customers.

“Inflation is now at levels not seen since the 1980s,” the economists write.

And there seems to be no end in sight: Inflation in the 20 leading industrialized and emerging countries, which has shot up significantly since the outbreak of war in Ukraine, is likely to still be 6.6 percent in 2023, according to forecasts.

Here, too, Germany is particularly affected due to its heavy dependence on Russian energy supplies.

For Germany, the OECD expects an inflation rate of 8.4 percent in 2022, and then 7.5 percent in 2023.

The Russian economy is also likely to experience a 5.5 percent contraction in 2022.

The main reason for this are the sanctions imposed by the West for the attack on Ukraine.

rai/Reuters

Source: spiegel

All business articles on 2022-09-26

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