The OECD warns that Europe is already on the brink of recession

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If gas supply problems persist in the coming months, a recession of 1.5% in Spain, 0.7% in Germany, 0.6% in France and 0.4% in Italy is expected in 2023.

Euskaraz irakurri: OCDEk ohartarazi du Europa atzeraldi ekonomikotik gertu dagoela

Many European countries will go into recession by 2023 if there is one gas supply problems in the coming months, a scenario that could arise if it is not possible to comply with the consumption reduction of 15% established by the EU, and especially when the winter is cold, the OECD warns.

In the interim Outlook report published this Monday, Organization for Economic Co-operation and Development (OECD) explains that if supply fails to meet needs, economic shocks will persist through 2024 and affect globally.

Even if that scenario does not materialize, the organization has had to adjust the forecasts it made three months ago downwards. because of the impact of the war in Ukraine and the restrictions due to covid in China, so that the slowdown in the global economy will translate into growth will be limited to 3% in 2022 and 2.2% in 2023.

Compared to forecasts made by the OECD itself in December 2021, before the war in Ukraine, that means $2.8 trillion will evaporate next year, a 2% drop in purchasing power.

The most affected region is Europe, where the gas price has already tripled in a year before reaching a potential supply problem and is practically ten times higher which it had on average in the period 2010-2019.

Europe on the brink of recession

Taking this and other consequences of the Russian invasion of Ukraine into account, the OECD has sharply adjusted its estimates of gross domestic product (GDP) growth in the eurozone for next year to 0.3% (1.3 points) . less than in June).

especially for Germany, where a recession of 0.7% (2.7 points less) is expected even if the predicted scenario does not materialize. Growth expectations have also been lowered in the other euro area heavyweights: 0.6% in France0.4% in Italy and 1.5% in Spain.

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Source: EITB

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