OECD Lowers Global Economic Growth Forecast to 2.2% for Next Year, Saying "We Are Paying the Price of War"

[Asia Economy Reporter Jeon Jinyoung] The Organisation for Economic Co-operation and Development (OECD) forecasted that the global economic growth rate for next year will slow down more than expected due to the aftermath of the Ukraine war.

On the 26th (local time), the OECD released its interim economic outlook report, lowering the global economic growth forecast for next year by 0.6 percentage points from June to 2.2%.

The OECD stated, "The world economy lost momentum this year due to Russia's illegal invasion of Ukraine," and added, "Europe, in particular, is paying the price for the Ukraine war."

The economic growth forecast for the Group of Twenty (G20) for next year was also lowered by 0.6 percentage points to 2.2%, matching the global growth forecast, but the Eurozone, which uses the euro, saw its growth forecast drop by 1.3 percentage points from three months ago to 0.3%.

Germany, which leads the European Union (EU) economy, appears to face the biggest impact. Due to factors such as Russia's reduction in natural gas supply, Germany's economic growth forecast for next year was lowered by 2.4 percentage points from the June forecast to -0.7%.

France and Italy's economic growth forecasts for next year were lowered by 0.8 percentage points from three months ago to 0.6% and 0.4%, respectively.

For the United States, the economic growth rate for next year is expected to be 0.5%, down 0.7 percentage points from three months ago, while China is forecasted to grow by 4.7%, a 0.2 percentage point decrease.

Russia is expected to experience negative growth again next year. The OECD projected Russia's gross domestic product (GDP) growth rate, which was 4.7% last year, to be -5.5% this year and -4.5% next year.

Additionally, the OECD predicted that Europe's economic growth rate will be 1.25 percentage points lower in this forecast, while inflation is expected to rise by 1.5 percentage points.

It also urged international cooperation, stating, "If the aftermath of the war intersects with the climate change crisis, it could threaten global food security."