– Global gross domestic product (GDP) growth is projected to fall from 3.1 percent this year to 2.2 percent in 2023, the Organization for Economic Co-operation and Development (OECD) said Tuesday in its latest Economic Perspective.
The 2022 figure is about half the pace recorded in 2021 during the upsurge of the pandemic, and the projected growth rate for 2023 is well below what was forecast before the outbreak of the Russia–Ukraine conflict.
“Asia will be the main growth engine in 2023 and 2024, while Europe, North America and South America will see very low growth,” he said.
The photo taken on February 17, 2022 shows the Singapore city skyline. (Photo by Then Chih Wey/)
The OECD expects the major emerging markets in Asia to account for about three-quarters of global GDP growth in 2023, while the US and European economies are expected to slow.
“Hold back by high energy and food prices, weak confidence, continued supply bottlenecks and the initial shock of tighter monetary policy, annual growth in the euro area in 2023 is projected to be 0.5 percent,” the organization said.
The US economy would only grow 0.5 percent in 2023, compared to 1.8 percent in 2022.
Energy markets remain among the significant downside risks.
“Europe has come a long way to replenish its natural gas reserves and curb demand, but this winter in the northern hemisphere will certainly be challenging,” he said, adding that higher gas prices or direct supply disruptions of gas would imply significantly weaker growth and higher inflation in Europe and the world in 2023 and 2024.
Accelerating investment in the adoption and development of clean energy sources and technologies will be crucial to diversify energy supply and ensure energy security, the OECD stressed.