In the report with world economic forecasts released today, the OECD forecasts Gross Domestic Product (GDP) expansion of 3% this year and 2.8% in 2023.

The outlook for this year is a downward revision of 1.5 percentage points (p.p.) from the growth projected in December.

The Paris-based organization reasons that the economic shocks associated with the war in Ukraine impact global commodity, trade, and financial markets.

"Before the outbreak of war, the outlook looked broadly favorable in 2022-23, with growth and inflation set to return to normal as the covid-19 pandemic and supply-side constraints ease," the report quoted by Lusa said.

The OECD explains that the cut in the outlook partly reflects the deep recessions in Russia and Ukraine, but growth is expected to be considerably weaker than expected in most economies, especially in Europe, where the oil embargo and coal imports from Russia are incorporated into the 2023 projections.

"Commodity prices have risen substantially, reflecting the importance of supply from Russia and Ukraine in many markets, inflationary pressures, and hitting real incomes and spending, particularly for vulnerable households," it notes.

The OECD also notes that in many emerging market economies, food shortage risks are high given the reliance on agricultural exports from Russia and Ukraine, while supply-side pressures have also intensified as a result of the conflict, as well as the shutdowns in China.

It also anticipates that consumer price pressure is likely to remain high, averaging around 5.5% in the major advanced economies in 2022 and 8.5% in the OECD as a whole, before receding in 2023 as supply chain and commodity price pressures ease and the impact of tighter monetary conditions begins to be felt.

Still, the OECD believes that 'core' inflation, while decelerating, should nevertheless remain at or above medium-term targets in many major economies at the end of 2023.