The world economy is slowing more than anticipated

Despite a boost in activity as COVID-19 infections drop worldwide, global growth is projected to remain subdued in the second half of 2022, before slowing further in 2023 to an annual growth of just 2.2%. Compared to OECD forecasts from December 2021, before Russia’s aggression against Ukraine, global GDP is now projected to be at least USD 2.8 trillion lower in 2023. There are many costs to Russia’s war, but this gives some sense of the worldwide price of the war in terms of economic output.

A key factor slowing global growth is the generalised tightening of monetary policy, driven by the greater-than-expected overshoot of inflation targets. Strict lockdowns associated with China’s zero Covid-19 policy have also impacted the Chinese and global economy. Shutdowns and property market weakness are slowing China’s growth to just 3.2% in 2022.

See also: Interim Economic Outlook, September 2022