European countries are on the brink of economic disaster, report warns

European countries teeter on the brink of recession and could be pushed over the edge by a harsh winter, while the continent’s largest economy faces a definite recession, according to a report issued Monday.

The Organization for Economic Cooperation and Development (OECD), a Paris-based economic policy forum, said that the war in Ukraine had slowed global economic growth more than predicted as early as June in a report released Monday. As inflation and energy shortages drive up prices of food and fuel, Germany and Russia will likely experience a full-on recession as Europe’s natural gas reserve capacity creates a tentative buffer for the remaining countries.

“Inflationary pressures that were already present as the global economy emerged from the pandemic have been severely aggravated by the war,” OECD Secretary-General Mathias Cormann said during a presentation.

Combined energy and business productivity shocks could tamp European economic growth by 1.25 percentage points in 2023 and drive up inflation by 1.5 percentage points, the report stated. This could “push many countries into a full-year recession in 2023” and suppress growth into 2024. – READ MORE