Economic growth in the world is slowing under the effect of inflation, notes Tuesday, November 22 the OECD in its latest forecasts, recommending a continuation of the rise in interest rates and more targeted government aid to overcome it. .
According to its latest projections, the rise in the world's gross domestic product (GDP) should reach 3.1% this year, barely more than half of the 5.9% achieved last year.
“Improving the global economic outlook”
The decline will continue next year with growth that will peak at 2.2%, before rising to 2.7% in 2024, predicts the organization which has very slightly raised its projection for 2022 compared to September, while now unchanged for next year.
“
An end to the war and a just peace in Ukraine would be the most effective way to improve global economic prospects
,” OECD Secretary-General Mathias Cormann said at a press conference, while condemning a “
Russia's war of aggression
”.
Biggest energy crisis since the 1970s
“
Growth is at half mast, high inflation is persistent, confidence has eroded and uncertainty is high
,” notes the Organization for Economic Co-operation and Development (OECD), bringing together 38 States, developed countries and some emerging.
“
The global economy is undergoing its worst energy crisis since the 1970s
,” according to the OECD's acting chief economist, Alvaro Santos Pereira.
"
The energy shock has brought inflation to levels not seen for several decades and lowered growth everywhere in the world
", continues the economist.
Price increases are expected to reach 8% in the fourth quarter this year in the G20 countries, which includes the world's major economies, before falling to 5.5% in 2023 and 2024, according to the organization's projections.
Read alsoAre we heading towards a world without growth?
Mathias Cormann believes that inflationary pressure is diminishing, while calling on central banks to firmly pursue their policy of raising interest rates.
"
We expect inflation to decline gradually thanks to the effects of tighter monetary policies, lower energy demand and price pressures over time, and normalization of transport and delivery times
,” he explained.
But he stressed that there was always a possibility that "
economic activity could weaken even further if energy prices rise even more or if disruptions affect the gas and electricity markets in Europe and in Asia
”.
The Secretary General of the OECD acknowledged that government aid had so far been useful in protecting households and businesses, but judged that in the future this aid “
should be temporary and better targeted
”.
Better targeting of aid
"
This would make it possible to minimize the budgetary cost, to concentrate (the aid) on the most vulnerable and to preserve the incentives to reduce energy consumption
", he explained.
The OECD recommends this better targeting of aid, particularly to France and Germany.
For France, the OECD projects growth of 2.6% and a slowdown to 0.6% next year, against 1% predicted by the government and 0.7% by the International Monetary Fund (IMF).
The French economy would then rebound, but quite weakly, to 1.2% growth in 2024.
The OECD envisages for France a “
decline in business and household confidence
” as well as an unemployment rate which will climb to 8.1% in 2024, moving the country away from the objective of full employment with a rate at 5% targeted by the government.
For Germany, whose growth will be limited to 1.8% this year before a recession projected at 0.3% in 2023, "
it is crucial that energy support measures put in place strong incentives to save gas and target vulnerable households
”.
Reduce worries
In the United Kingdom, after the resounding failure of the tax reduction policy sought by former Prime Minister Liz Truss, the OECD calls on the government of her successor Rishi Sunak to "
ensure that future budgetary objectives follow a well-defined and transparent
” in order to “
reduce concerns about debt sustainability
”.
Finally, in poor countries, the consequences of the war in Ukraine "
still constitute a threat to world food security, especially when they are added to new extreme weather events resulting from climate change
", explains the OECD.