Global economic growth, and certainly in Europe, will be considerably lower in the coming period than previously thought. The Organization for Economic Co-operation and Development (OECD) forecasts a growth of 2.2 percent for next year instead of the 2.8 percent forecast in June.
The outlook for Germany is entirely bleak. Europe’s largest economy, heavily dependent on Russian gas, is expected to shrink by 0.7 percent next year. Previously, a plus of 1.7 percent was expected.
Europe, in particular, has to pay the price for sanctions against Russia and the lack of Russian gas, which has been supplied much less since the war in Ukraine. The Nord Stream 1 pipeline has been completely shut down for a few weeks. In the eurozone, the economy will grow more than 3 percent this year, but it will drop to 0.3 percent next year.
But the world’s largest economy, the United States, must also expect only a small growth of 0.5 percent for next year. Gross domestic product growth is also expected to be lower this year, at 1.5 percent.
The countries are being hit by high inflation, leading to less household purchasing power. Therefore, the OECD believes banks should continue raising interest rates to curb rising inflation. The OECD consists of 38 countries, including many European countries and countries such as the United States, Mexico, Canada, Chile, South Korea and Australia.