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The global economy is slowing more than expected a few months ago as Russia’s war in Ukraine and global inflation cause major central banks The Organization for Economic Co-operation and Development said on Monday with a grim forecast that interest rates would rise at the fastest rate in decades.

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Organizations based in Paris still see global economy growth of 3.0% this year, but a significant slowdown is forecast next year, with growth slowing to 2.2%. This is a sharp change from the June forecast of 2.8% and represents a $2.8 trillion decline in global production.

In the US, growth is expected to slow to 1.5% this year and 0.5% in 2023. The OECD expects eurozone growth to be just 1.25% this year, with the risk of a deep downturn in some countries in winter and 0.3%. % in 2023. Among countries using the euro, the OECD notes a slowdown in Germany and Spain.

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The war in Ukraine has pushed the global cost of essential commodities such as food and fertilizer to its highest level in years, exacerbating already high inflation. It also pushed up energy prices even more, further reducing household spending in Europe.

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As is often the case, the OECD has warned that high prices, including soaring food and energy prices, will hit low-income countries hardest.

“The global economy has lost momentum as a result of Russia’s unprovoked, unjustified and illegal war of aggression against Ukraine,” said OECD Secretary General Matthias Kormann. “GDP [gross domestic product] Growth has stalled in many countries, and economic indicators point to a prolonged slowdown.”

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The lockdown in China to stop the spread of COVID-19 has also resulted in further disruption to production and the supply chain.

Inflation is expected to ease gradually over the next year in most G20 countries as major central banks continue to tighten monetary policy, slowing growth. The OECD projects headline inflation to decline from 8.2% this year to 6.6% in 2023, well above many central banks’ target of 2%.

“These challenging economic situations will require bold, well thought out and well coordinated policies,” Kormann said.