OECD: Next year UK to be second largest economy in world in terms of declining growth

Britain will be the second weakest among the world's major economies next year as the global economy continues to suffer the effects of the biggest energy shock in four decades.

The Organization for Economic Cooperation and Development said that only Russia, among the members of the G20 group, will experience a larger contraction than Britain in 2023.

In its semi-annual economic forecast, the OECD said the U.K. economy will grow 4.4 percent this year but shrink 0.4 percent next year.

Although the OECD has lowered growth forecasts for most countries since June, only Russia's 5.6% contraction is projected to be more severe than Britain's. The poor performance is projected to continue into 2024 with growth of 0.2%, the weakest along with Russia.

Acting OECD chief economist Alvaro Pereira said he expects a less severe downturn next year than the 1.4% decline indicated by the Office of Fiscal Responsibility in last week's fall report, but a more modest recovery in 2024 than the OECD projected.

Overall, the OECD expects growth in the 38 wealthy member countries to be 0.8% in 2023, half what was expected six months ago. The U.S. and eurozone are projected to grow by 0.5%, but growth is expected to be stronger in the three major Asian economies of China (4.6%), Indonesia (4.7%) and India (5.7%).

According to OECD forecasts, of the three largest EU economies, Germany will be the third worst performing G20 country (-0.3%), while Italy (0.2%) and France (0.6%) are likely to show modest growth.