Agencies

November 23: The global economy should avoid a recession next year but the worst energy crisis since the 1970s will trigger a sharp slowdown, with Europe hit hardest, the Organisation for Economic Cooperation and Development (OECD) said.

According to a news report published by Reuters on Tuesday, the OECD added that fighting inflation should be policymakers' top priority.

National outlooks vary widely, although Britain's economy is set to lag major peers, the OECD said.

It forecast that world economic growth would slow from 3.1 percent this year - slightly more than the OECD foresaw in its September projections - to 2.2 percent next year, before accelerating to 2.7 percent in 2024.

“We are not predicting a recession, but we are certainly projecting a period of pronounced weakness,” Reuters quoted OECD head Mathias Cormann as saying during a news conference while presenting the organisation's latest Economic Outlook.

According to Reuters, the OECD said that the global slowdown was hitting economies unevenly, with Europe bearing the brunt as Russia's war in Ukraine hits business activity and drives an energy price spike.

It forecast that the 19-country euro zone economy would grow 3.3 percent this year then slow to 0.5 percent in 2023 before recovering to expand by 1.4 percent in 2024. That was slightly better than in the OECD's September outlook, when it estimated 3.1 percent growth this year and 0.3 percent in 2023.

Outside the euro zone, the British economy was seen shrinking 0.4 percent next year as it contends with rising interest rates, surging inflation and weak confidence. Previously the OECD had expected 0.2 percent growth.

The US economy was set to hold up better, with growth expected to slow from 1.8 percent this year to 0.5 percent in 2023 before rising to 1.0 percent in 2024. The OECD had previously expected growth of only 1.5 percent this year in the world's biggest economy and its estimate for 2023 was unchanged.

According to Reuters, China, which is not an OECD member, was one of the few major economies expected to see growth pick up next year, after a wave of COVID lockdowns. Growth there was seen rising from 3.3 percent this year to 4.6 percent in 2023 and 4.1 percent in 2024, compared with previous forecasts of 3.2 percent in 2022 and 4.7 percent for 2023.

The forecast, however, does not take into account the latest curbs imposed by China to deal with the flare-ups in Covid cases.