OECD Economic Outlook, Nov. 2022, predicts that Americans and Europeans ought to brace themselves for even worse times ahead – next winter

23 Nov 2022

On November 22, the Organization for Economic Co-operation and Development (OECD) published a release of its flagship report OECD Economic Outlook. 

This intergovernmental organization tracks data across about 48 countries, estimating growth for the world’s biggest economies. The report takes stock of countries’ performance levels each year, and forecasts their prospects for the following two years.

This year’s OECD predictions are sobering. 

Álvaro Santos Pereira, OECD Chief Economist ad interim says that global growth in 2022 will rise by about 3.1%—a relatively optimistic outlook, given the severe energy crisis that has hit the world this year.

But Pereira says that the true scale of the world’s economic woes will only become clear in 2023, when the OECD predicts “a significant slowdown” for the global economy to 2.2%, and then a “little bit of a rebound in 2024” to about 2.7%.

For Americans, the prediction is even worse.

U.S. growth just 0.5% next year

The organization estimates the U.S. economy will grow by 1.8% this year, and just 0.5% next year, before recovering slightly in 2024 to 1% growth. 

Since the U.S. exports more energy than it imports—including liquified natural gas (LNG) to Europe, to replace some of Europe’s shortage of gas—the U.S. has been shielded from the full economic impact of the crisis. 

Even so, Americans face high inflation and a weakening housing market, and companies still face a tight labor market and rising wages. “Largely as a result of the crisis, domestic food and gasoline prices remain elevated compared with the pre-pandemic period,” the report says.

With millions of Americans and Europeans bemoaning the huge rise in cost to heat their homes and power their businesses during the bitter cold months, they ought to brace themselves for even worse times ahead—next winter. 

 

By Gilbert Castro | ENC News

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