"A humanitarian crisis is unfolding before our eyes, leaving thousands of people dead, forcing millions of refugees to flee their homes and threatening an economic recovery that was on the way after two years of pandemic", alarmed the number two and chief OECD economist, Laurence Boone, in a text in the preamble to these forecasts entitled "the price of war".

The Paris-based Organization for Economic Cooperation and Development, which brings together 38 developed countries, refused in March to publish detailed forecasts, given the great uncertainty created by the Russian invasion of Ukraine three weeks earlier.

She had barely calculated that the war would cost more than one point of global growth and 2.5 points of inflation over one year.

It now foresees global GDP rising by 3% in 2022, a level much lower than the previous forecast of 4.5% published last December.

"The world will pay a heavy price for the Russian war against Ukraine", warns Laurence Boone, specifying during a press conference on Wednesday that "this setback is a direct consequence of the war".

Before the OECD, most major economic organizations have lowered their forecasts: the World Bank on Tuesday mentioned growth of 2.9% for this year and the International Monetary Fund in April reduced its forecast to 3.6%.

The war bill will vary greatly depending on the region: the euro zone should post a meager 2.6% against 4.3% forecast in December, with a plunge for Germany to 1.9% (-2.2 points ) and France at 2.4% (-1.8 points).

The United Kingdom shows 3.6% (-1.1 point) but stalls completely at 0% for 2023 against 2.1% previously anticipated, due to "depressed demand" according to the OECD and strong inflationary pressures .

Subject to numerous Western economic sanctions, Russia is expected to suffer a 10% recession.

Doubling of inflation forecasts

Inflation will continue to soar.

Pointed out for months as one of the balls of the recovery, it is cited more than 800 times in the 229-page report from the OECD.

Rarely, the institution has doubled its inflation expectation among member countries of the organization to 8.5% this year, which would make it an annual high since 1988. Without Turkey, however, it is closer by 6%.

Deemed still "temporary" in September 2021 by the OECD, inflation has accelerated markedly with the persistence of blockages in supply chains and the surge in energy, food and metal prices after the outbreak of the war. .

Rising prices first affect the most precarious Valentin RAKOVSKY AFP

It caused a plunge in household confidence in member countries even lower than during the spring 2020 confinements, shows the OECD.

This inflation "erodes disposable household income (...) and slows consumption", summarizes Laurence Boone.

Within the fragile regions, "the war sends shock waves everywhere in Africa and the Middle East", also said Ms. Boone, regions threatened by food prices and shortages in Lebanon, Egypt or Tunisia where households spend up to 40% of their income on food and energy, she said.

For states that can, the OECD advises the distribution of "temporary, timely and well-targeted" aid for vulnerable households and businesses, and better international cooperation for fragile states.

The organization is counting on an easing of inflationary pressures next year, but warns that nothing is certain given the context: "inflationary pressures could prove to be stronger than anticipated", "the uncertainty surrounding these forecasts is great ".

It puts forward the hypotheses of a sudden halt in Russian gas exports to Europe, an even higher rise in energy prices or continued disruptions in distribution chains.

A headlong rush of inflation could lead to sharp interest rate hikes by central banks, she also fears.

From there to anticipating a global recession?

IMF Managing Director Kristalina Georgieva ruled out this hypothesis at the Davos forum in late May.

The OECD report cites the risk of "recession" posed to Europe in 2023 by potential shocks in Russian energy supplies.

© 2022 AFP