Global economic growth is slowing more than forecast months ago as energy and inflation crises risk turning into recessions in major economies, the OECD said.
While global growth this year was still expected to be 3.0 percent, it is now projected to slow to 2.2 percent in 2023, the Organization for Economic Cooperation and Development said.
It is particularly pessimistic about the outlook for Europe, the economy.
Global output next year is projected to be $2.8 trillion lower than what the OECD predicted before the war in Ukraine -- an income loss worldwide equivalent to the size of the French economy.
The OECD predicts that eurozone economic growth will slow from 3.1 percent this year to just 0.3 percent in 2023, meaning that eurozone countries will spend at least part of the year in recession.
The OECD was particularly unhappy with the Russian gas-dependent German economy, predicting that it will shrink by 0.7% next year, compared with a June estimate of 1.7% growth.
The OECD warned that further disruptions in energy supplies would hit growth and spur inflation, especially in Europe, where they could reduce activity by another 1.25 percentage points and raise inflation by 1.5 percentage points, pushing many countries into recession for all of 2023.Although the United States is much less dependent on energy imports than Europe, it faces an economic slowdown as the U.S. Federal Reserve raises interest rates to deal with inflation.
The OECD predicts that growth of the world's largest economy will slow from 1.5% this year to just 0.5% next year, down from June's projections of 2.5% in 2022 and 1.2% in 2023.
Meanwhile, China's strict COVID-19 controls this year mean its economy will grow only 3.2% this year and 4.7% next year, compared with earlier OECD expectations of 4.4% in 2022 and 4.9% in 2023.
Despite the rapidly deteriorating outlook for the major economies, the OECD has said that further rate hikes are necessary to fight inflation, predicting that the policy rates of most major central banks will exceed 4% next year.
With many governments increasing support packages to help households and businesses cope with high inflation, the OECD said such measures should target those most in need and be temporary to reduce their cost and not exacerbate high debt after COVID.