Now is the time to own gold! OECD slashes global growth forecast

The Organisation for Economic Co-operation and Development, the Organisation for Economic Co-operation and Development, became the latest international body to cut its forecast for global economic growth this year, but it played down the possibility of a prolonged period of so-called stagflation. The OECD estimates that global GDP will reach 3% in 2022, down 1.5 percentage points from its December forecast .

"Russian invasion of Ukraine, along with Asia's coronavirus lockdown, has created a new set of adverse shocks," the Paris-based group said in its latest economic outlook on Wednesday. Russia's invasion of Ukraine has had a huge impact on the global economy, but the outbreak in Asia Lockdowns have also weighed on global economic growth.



The World Bank said on Tuesday that it also turned more pessimistic about the outlook for global economic growth. Global GDP will reach 2.9% this year, the agency said, down from a forecast of 4.1% in January .

In a report on Wednesday, the OECD said the downgrades partly reflected deep recessions in Russia and Ukraine.

"But growth in most economies will be significantly weaker than expected, especially in Europe, where embargoes on Russian oil and coal are included in forecasts for 2023," the agency said. At the end of May, the European Union moved to impose oil restrictions on Russia. embargo. The EU also agreed to stop buying coal from Russia a month earlier. The EU has been heavily reliant on Russian fossil fuels, and cutting supplies of some of these fuels overnight would have a major impact on the economy.

Still, the economic outlook for the 19-member euro zone and the United States isn't much different. The European Union's economy will grow 2.6 percent this year and the U.S. by 2.5 percent, the OECD said .

The cost of living crisis is also an economic issue for the UK, with GDP forecast to be 3.6% this year before falling to zero next year . "Inflation in the UK will continue to rise due to persistent labour and supply shortages and high energy prices, peaking at over 10% by the end of 2022, before gradually declining to 4.7% by the end of 2023," the OECD said.

The global macro outlook for emerging economies is bleak, especially as they are expected to be the most hurt by food supply shortages . "In many emerging market economies, the risk of food shortages is high due to reliance on Russian and Ukrainian agricultural exports," the OECD said.



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GMT+8 at 10:38 on June 9, spot gold was reported at $1851.81 per ounce