Germany will fall into recession in 2023. That was the forecast made by the OECD on Monday in Paris. The AFP news agency reports. In addition, the OECD is lowering its global growth forecast for 2023 from 2.8 to 2.5 percent.
“The war has pushed up energy prices, particularly in Europe,” the OECD report said. This has increased inflationary pressure at a time when the cost of living has already risen sharply worldwide due to the aftermath of the corona pandemic.
In many national economies, companies are therefore passing on their higher energy, transport and personnel costs to customers. “Inflation is now at levels not seen since the 1980s.” This is forcing central banks to tighten monetary policy more quickly than expected, the OECD said.
The experts therefore corrected their previous growth forecasts downwards. Annual GDP growth will slow down in the USA and the euro area, “several European economies could experience stronger declines during the winter months”. For the euro zone, the OECD expects growth of 3.1 percent this year and 0.3 percent in the coming year.
Growth has also suffered in China 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 OECD emphasized.
The organization said there was significant uncertainty and significant downside risks to the economic outlook. These included the risk of further increases in food and energy prices, which could push many people into poverty. This also included possible bottlenecks in the gas supply in the approaching winter months in the northern hemisphere. “Reducing energy consumption and diversifying sources of supply will be crucial,” warned the OECD.