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The global economy is slowing more than was anticipated a few months ago as Russia's war in Ukraine and global inflation forces major central banks to raise interest rates at the fastest pace in decades, the Organization for Economic Cooperation and Development said Monday in a grim outlook.
The Paris-based organizations still sees the global economy expanding 3.0% this year, but is projecting a major slowdown next year, with growth decelerating to just 2.2%. That is a sharp change from the 2.8% rate it predicted in June and marks a $2.8 trillion decline in global output.
In the U.S., growth is expected to cool off to 1.5% this year and 0.5% in 2023. The OECD expects the euro zone to grow just 1.25% this year, with risks of a deep decline in several nations during the winter, and 0.3% in 2023. Within the nations that use the euro, the OECD sees slowdowns in Germany and Spain.
The war in Ukraine has pushed the global cost of essential commodities like food and fertilizer to the highest level in years, exacerbating already high inflation. It has also pushed energy prices even higher, further weakening household spending in Europe.
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