LONDON -- The Russian war in Ukraine and the food and energy crises that it has worsened will significantly reduce global economic growth and increase inflation, according to the Organization for Economic Cooperation and Development Wednesday.
China's "zero COVID" policies have hampered manufacturing supply chains and are weighing on a global economy just beginning to recover from the COVID-19 pandemic. The Paris-based OECD stated that China's policies have slowed down the world economy, making it the latest institution to slash their growth forecasts and underscoring the dimming outlook.
The OECD is a club of wealthy countries that expects the world's economy to grow 3% by 2022. This is a decrease from the 4.5% it forecast in December.
For the 38 OECD member countries (which include many European nations and the United States), inflation is expected to be nearly 9%. This is nearly twice the previous estimate.
Mathias Cormann, Secretary-General of OECD, stated that Russia's war was indeed putting a heavy cost on the global economy at a Paris press conference.
As the organization prepares for its annual meeting, which will begin Thursday with government ministers and feature video remarks from Volodymyr Zelenskyy, it released its forecast.
The OECD warned the poor that economic turmoil would be the most devastating. It said that the war is disrupting basic food supplies like wheat and energy. Russia and Ukraine are both major global suppliers and that this is causing inflation, which eats away at disposable income as well as living standards.
Because European countries are more exposed to war through trade and energy, the war is causing the greatest economic decline. The OECD raised alarm about food insecurity in poorer countries further afield.
"We are very concerned about the situation regarding food in low-income countries. Laurence Boone, chief economist at OECD, stated that the war was sending shockwaves all over the world, including to Africa and the Middle East. The war could lead to starvation. It could lead to political unrest or turmoil.