Global slowdown to hit Europe hardest - OECD

STORY: Europe is set to take the brunt of a global slowdown next year.

But the world should avoid an outright recession.

That’s according to new estimates from the OECD.

Organisation boss Mathias Cormann says there are just too many headwinds:

"It is sadly a statement of the obvious that the global economy continues to face significant challenges. Russia's unprovoked, unjustifiable and illegal war of aggression continues to rage. Global growth is slowing down. It continues to slow down and confidence has weakened. Inflation has become broad based and persistent, and in response central banks have been raising policy rates and global financial conditions have tightened significantly."

The OECD says the euro zone will grow just 0.5% next year.

Regional powerhouse Germany is expected to do even worse, with a contraction of 0.3% forecast.

Outside the euro zone, the UK is set to do worse still.

However, the U.S. should eke out some growth, while China is one of the few major economies expected to see expansion pick up, as lockdowns ease.

But the organisation reckons that won’t be enough to avert an overall slowdown.

"We project global GDP to slow from 3.1% in 2022 to 2.2% in 2023. That is GDP growth well below the rate foreseen prior to the start of the war.”

Countries around the world are feeling the strain of rising inflation and rates.

Fuel costs are soaring too, with the OECD talking of the worst energy shock since the 1970s.