Persistent inflation, rising interest rates will weigh on global economy, OECD predicts
The global economy is bouncing back from an an energy price spike fed by Russia's invasion of Ukraine
FRANKFURT, Germany (AP) — The global economy must steer through a precarious recovery this year and next as inflation keeps dragging on household spending and higher interest rates weigh on growth, banks and markets.
That was the takeaway Wednesday from the latest economic outlook by the Paris-based Organization for Economic Cooperation and Development. The group, made up of 38 member countries, raised its growth forecast this year to 2.7% from an estimated 2.2% in November and foresaw only a tiny acceleration to 2.9% next year.
The rebound from the COVID-19 pandemic and energy price spike tied to Russia's invasion of Ukraine is likely to be weak by past standards, with an average growth of 3.4% recorded in the pre-pandemic years 2013-2019.
The path ahead is fraught with risks, from the escalation of Russia's war in Ukraine — with a dam collapse Tuesday that the sides blamed on each other — to debt troubles in developing countries and rapid interest rate hikes having unforeseen effects on banks and investors.
