The world economy: Downside risks predominate

Even as energy and food price rises have come off their highs and headline inflationary pressures have eased, the outlook for the world economy, while improved, remains fragile more than a year after Russia’s war of aggression in Ukraine.

Downside risks continue to predominate. Trade tensions remain high, concerns about financial vulnerabilities are rising – including in financial institutions, housing markets and low-income countries – and the risk of high headline inflation persists.

Global economic growth is expected to remain at below-trend rates in 2023 and 2024, following 3.2% growth in 2022 (more than 1 percentage point lower than projected at end of 2021), weighed down by the effects of the war and the associated cost-of-living crisis in many countries. Structural reforms aimed at boosting productivity growth will be vital, alongside fiscal support more targeted at the most vulnerable and monetary policy to curb persistent inflation.

> Read: OECD Interim Economic Outlook (March 2023)

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