THE WAR IN UKRAINE WILL HEAVY WEIGHT

ON GROWTH AND INFLATION

WORLDWIDE ACCORDING TO THE OECD

The consequences of the war in Ukraine could cause inflation to soar to 8.5% among OECD member countries in 2022, the international organization warns in its latest economic forecasts on Wednesday, a level twice as high as the one she anticipated in December.

The rise in prices should then slow in 2023, warns the OECD, which brings together 38 developed countries across the planet, while warning of a worsening of these prospects in the event of new economic shocks.

Global growth for 2022 lowered to 3%

Global growth will strongly feel the consequences of the war in Ukraine this year, the organization also warned, raising its growth expectation to 3% against 4.5% last December. Particularly affected, the euro zone should record a 2.6% increase in its GDP against 4.3% previously forecast, and France, for example, an increase of 2.4% against 4.2% imagined in December by the organization international based in Paris.

"The world will pay a heavy price for the Russian war against Ukraine", warned the number two and chief economist of the OECD, Laurence Boone, in an introductory text to these forecasts entitled "the price of war". “A humanitarian crisis is unfolding before our eyes, leaving thousands dead, forcing millions of refugees to flee their homes and threatening an economic recovery that was on the way after two years of the pandemic,” she continues.

An invoice that changes between geographies

The bill for the war varies significantly depending on the geographical area: the euro zone sees its growth forecast significantly reduced to 2.6% against 4.3% in December, with a plunge for Germany to 1.9% (-2 .2 points) and France at 2.4% (-1.8 points). The United Kingdom is doing quite well this year with 3.6% expected (-1.1%) but stalls completely at 0% for the 2023 forecast, against 2.1 expected previously.

The United States should experience growth of 2.5% in 2022, against 3.7% expected in December, and China of 4.4% (against 5.1%). Still deemed “temporary” in September 2021 by the OECD, inflation has picked up markedly with the persistence of problems in supply chains and soaring prices for energy, food and metals, aftermath of the war.

While the OECD sees these pressures easing next year, it nevertheless warns that, given the prevailing uncertainty, they could still worsen.

But soaring inflation could lead to sharp interest rate hikes by central banks, further threatening an already shaky economic recovery, the organization fears.