OECD slashes growth outlook, but sees limited stagflation risk

The world economy is set to grow 3% this year, much less than the 4.5% expected when the OECD last updated its forecasts in December.

Any quick relief from price hikes is unlikely, with inflation expected to peak at 8.5% this year in OECD countries before slipping to 6.0% in 2023. Picture: Leah Farrell/RollingNews.ie

The war in Ukraine has made the growth outlook far bleaker even though the global economy should avoid a bout of 1970s-style stagflation, the OECD said on Wednesday, slashing its growth forecasts and jacking up its inflation estimates.

The world economy is set to grow 3% this year, much less than the 4.5% expected when the Organisation for Economic Cooperation and Development last updated its forecasts in December.