(REUTERS)1. OECD SECRETARY-GENERAL MATHIAS CORMANN WALKING TO PODIUM AT START OF NEWS CONFERENCE 2. (SOUNDBITE) (English) OECD SECRETARY-GENERAL MATHIAS CORMANN SAYING: “We are facing a global and broad-based surge in inflation. The inflationary pressures were already building up during the recovery from the COVID-19 pandemic as economies re-opened and supply couldn’t match the sudden surge in demand. Russia’s war of aggression against Ukraine brought additional disruptions to commodity markets that pushed prices on those markets up further. The elevated food and energy prices are now spreading more broadly to affect core goods and services across many countries. Households and firms are suffering as costs rise in purchasing power is taking a hit.” “The war, the burden of high energy and food prices, as well as ‘zero COVID-19′ policies in China mean that growth will be lower and inflation will be higher and more persistent. We project global GDP to grow at a modest 3% in 2022 and an even weaker 2.2% in 2023. This is well below the pace of economic growth projected prior to the war, and represents around US$2.8 trillion in foregone global output in 2023.” “First it is critical that monetary and fiscal policy work hand in hand to curb inflation while cushioning its impact monetary policy will need to continue to tighten in most major economies to time inflation durably.” PARIS, FRANCE (RECENT – SEPTEMBER 3, 2022) (REUTERS – Access All) “The policymakers should provide fiscal support to vulnerable households and firms but in a way which ensures that price signals still operate to reduce energy consumption and also in a way that is well targeted and temporary.” “At near term, energy security and affordability supply diversification energy efficiency and demand side measures are urgent priorities in the short term, which should be accompanied by stronger policy measures to enhance investment in clean technologies. Investments in clean energy are particularly needed to improve energy security affordability and to help achieve energy transition goals and to ease pressure on the availability of gas used as a transition fuel.” PARIS, FRANCE (RECENT – SEPTEMBER 3, 2022) (REUTERS – Access All) 28. METRO CROSSING RIVER SEINE 29. CHIMNEYS IN BAKCGROUND WITH SMOKE COMING OUT STORY: Global economic growth is slowing more than was forecast a few months ago in the wake of Russia’s invasion of Ukraine, as energy and inflation crises risk snowballing into recessions in major economies, the OECD said on Monday (September 26). While global growth this year was still expected at 3.0%, it is now projected to slow to 2.2% in 2023, revised down from a forecast in June of 2.8%, the Organisation for Economic Cooperation and Development said. The Paris-based policy forum was particularly pessimistic about the outlook in Europe – the most directly exposed economy to the fallout from Russia’s war in Ukraine. Global output next year is now projected to be $2.8 trillion lower than the OECD forecast before Russia attacked Ukraine – a loss of income worldwide equivalent in size to the French economy. “We are facing a global and broad-based surge in inflation. Russia’s war of aggression against Ukraine brought additional disruptions to commodity markets that pushed prices on those markets up further. The elevated food and energy prices are now spreading more broadly to affect core goods and services across many countries,” OECD Secretary-General Mathias Cormann said in a news conference. The OECD projected euro zone economic growth would slow from 3.1% this year to only 0.3% in 2023, which implies the 19-nation shared currency bloc would spend at least part of the year in a recession, defined as two straight quarters of contraction. The OECD was particularly gloomy about Germany’s Russian-gas dependent economy, forecasting it would contract 0.7% next year, slashed from a June estimate for 1.7% growth. The OECD forecast that the world’s biggest economy would slow from 1.5% growth this year to only 0.5% next year, down from June forecasts for 2.5% in 2022 and 1.2% in 2023. Meanwhile, China’s strict measures to control the spread of COVID-19 this year meant that its economy was set to grow only 3.2% this year and 4.7% next year, whereas the OECD had previously expected 4.4% in 2022 and 4.9% in 2023. Despite the fast deteriorating outlook for major economies, the OECD said further rate hikes were needed to fight inflation, forecasting most major central banks’ policy rates would top 4% next year. With many governments increasing support packages to help households and businesses cope with high inflation, the OECD said such measures should target those most in need and be temporary to keep down their cost and not further burden high post-COVID debts.
Energy, inflation crises risk pushing big economies into recession
