OPEC economists see gloomy outlook for 2023

Economists at the Organization of the Petroleum Exporting Countries warned of “multiple” signals pointing to headwinds for the global economy in 2023.File photo courtesy of Mohamed Messara/EPA-EFE

Economic policymakers around the world have been raising lending rates for much of last year in an effort to bring inflation down, although those policies may have been aggressive enough to trigger a global contraction.

IMF Managing Director Kristalina Georgieva said on the first weekend of January that a third of the world economy possible A recession this year is expected to hit Europe hardest.

The World Bank followed suit last weeksaid it expects the global economy to grow 1.7% this year, down from a 3% growth forecast six months ago.

“Given the fragile state of the economy, any new adverse developments — such as higher-than-expected inflation, a sudden rise in interest rates to curb inflation, economic recovery Coronavirus disease Pandemic or escalation in geopolitical tensions – could push the global economy into recession,” the World Bank warned.

OPEC is less pessimistic, predicting global growth of 2.5% this year, although that marks a 0.5% slowdown in 2022. Economists at OPEC expect the European economy to grow just 0.4% this year, down from 3.2% in 2022. In 2022, Russia is expected to contract 0.5% in revenue due to Western sanctions against its oil and gas, compared with a negative 4% last year.

The U.S., the world’s largest economy, is expected to grow at 1% this year, down from 2% last year. China, second only to the United States, has grown 5.6 percent this year.Beijing Tuesday The report said growth would be just 3% in 2022, the slowest pace since the 1970s.

A strict, zero-tolerance approach to the pandemic stifled the Chinese economy for much of last year, though that policy has since eased.

For OPEC, both the U.S. and Chinese economies are expected to stand out from a likely underwhelming year.

“While growth momentum is expected to extend into 2023, the world economy will continue to grapple with many challenges amid high inflation, tightening monetary policy by major central banks, and high sovereign debt levels in many regions,” the economists wrote. “Additionally, geopolitical and COVID-19-related risks and uncertainties could increase downside risks for some selected economies.”