World economic growth is slowing due to decades-high inflation, the OECD said Tuesday, calling for 'essential' further monetary policy tightening and 'more targeted' government support.
Inflation had already been on the rise before the Ukraine conflictPARIS - World economic growth is slowing due to decades-high inflation, the OECD said Tuesday, calling for"essential" further monetary policy tightening and"more targeted" government support.
Amid the effects of Russia's war in Ukraine,"growth has lost momentum, high inflation is proving persistent, confidence has weakened, and uncertainty is high", it said in its latest forecasts. The energy shock has pushed inflation up"to levels not seen for many decades" and is hitting economic growth around the world, he added.
Cormann said that inflationary pressure was decreasing, but urged central banks to press on with interest rates hikes."We do expect inflation to gradually moderate as tighter monetary policy takes effect, demand and energy price pressures diminish over time and transport costs and delivery times continue to normalise," he told reporters.
"Our central scenario is not a global recession but a significant growth slowdown for the world economy in 2023, as well as still high, albeit declining, inflation in many countries," Santos Pereira said.It also advocated targeted support for families and firms to avoid exacerbating inflationary pressures, with energy costs"likely to remain high and volatile for some time".
And in Britain, after the economic havoc under short-lived ex-prime minister Liz Truss, the OECD called on her successor Rishi Sunak's government to ensure future budgetary targets were well defined and transparent to reduce concern about debt sustainability.
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