World Economic Prospects: Growth prospects worsen further

August/September 2022

Each month Oxford Economics’ team of 300 economists and analysts updates our baseline forecast for 200+ countries using our innovative Global Economic Model. Fully linking individual country models through global assumptions about trade volume and prices, competitiveness, capital flows, interest and exchange rates, and commodity prices, our model provides a rigorous and consistent structure for forecasting and understanding the impact of economic shocks. Below is just the top-level summary of our analysis of the latest economic developments.

• Global growth prospects have worsened further over the last month. We have lowered our forecasts for world growth by 0.2ppts to 2.8% this year and by 0.1ppt to 2.3% in 2023, making next year’s forecast growth the lowest outside a recession year since 2008.
• A key factor behind deteriorating growth prospects remains high inflation, which is sapping consumers’ real incomes and raising business costs.
• This is especially a problem in the G7, where inflation is expected to average 7% this year and 2.8% in 2023.

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