The Russian invasion of Ukraine and the ongoing battle against COVID-19 in China have led the Organisation for Economic Co-operation and Development (OECD) to lower its forecast for global growth.

The OECD now expects the global economy to expand by about 3.0% in 2022, down from 4.5% in its December forecast.

“Growth is set to be markedly weaker than expected in almost all economies. Many of the hardest-hit countries are in Europe, which is highly exposed to the war through energy imports and refugee flows.”

Although hampered by the global tailwinds, Canada’s economy is benefitting from high prices for natural resources and agricultural products. As a result, the OECD’s forecast for Canada in 2022 is largely unchanged from its December estimate (3.9% versus 3.8%).

Inflation will, however, remain a problem in Canada and around the world for longer than previously expected.

“A gradual reduction of supply chain and commodity price pressures and the impact of rising interest rates should begin to be felt through 2023, but core inflation is nonetheless projected to remain at or above central bank objectives in many major economies at year-end.”

The World Bank has also reduced its global growth forecast. The Bank’s new estimate is for the global economy to grow by 2.9% in 2022 rather than the 4.1% it was anticipating in January.

Answer to the previous trivia question: At 6%, “basic and industrial chemical, plastic and rubber products” was the second largest category of international merchandise exports from Alberta in April.

Today’s trivia question: In which city are the headquarters of the OECD located?