Feb. 21 (UPI) — Pointing to higher inflation, higher interest rates and the war in Ukraine in some cases, the Organization for Economic Cooperation and Development said Tuesday that economic expansion in member states moderated in the fourth quarter.
“OECD quarterly expansion rates remained weak throughout 2022 amid peak inflation and emerging interest rates,” he said.
“I must report that the State of the Union and the state of our economy are strong,” US President Joe Biden said in early February.
Tension is no less severe in Europe, as the European Central Bank expects inflation to persist at around 6. 3% for the year, which is very much in line with current levels of the US economy. Central bank officials estimate an inflation rate closer to 2%. on an annual basis.
“Keeping interest rates at restrictive levels will ultimately reduce inflation through reduced demand and also protect against the threat of a persistent rise in inflation expectations,” the ECB said on Friday.
However, the OECD said that the overall economic functionality of its member states was greater than at the same time in 2019, before the start of the COVID-19 pandemic.