Global economic growth is slowing more than it was forecast a few months ago in the wake of Russia’s invasion of Ukraine, as energy and inflation crises risk snowballing into recessions in major economies, the Organization for Economic Cooperation and Development (OECD) warned Monday.

The Paris-based policy forum, though, sees the Turkish economy growing more than it estimated this year, following in the footsteps of several international financial organizations that also revised their forecasts upward after a stronger than expected second-quarter expansion.

While global growth this year is still expected at 3%, it is now projected to slow to 2.2% in 2023, revised down from a forecast in June of 2.8%, the OECD said in a bleak report titled "Paying the Price of War."

The organization is particularly pessimistic about the outlook in Europe – the most directly exposed economy to the fallout from Russia’s war in Ukraine, which it said has aggravated inflationary pressure when the cost of living was already rising quickly.

Global output next year is now projected to be $2.8 trillion lower than the OECD forecast before Russia attacked Ukraine – a loss of income worldwide equivalent in size to the French economy.

"The global economy has lost momentum in the wake of Russia’s unprovoked, unjustifiable and illegal war of aggression against Ukraine. GDP growth has stalled in many economies and economic indicators point to an extended slowdown," OECD Secretary-General Mathias Cormann said in a statement.

The OECD projected eurozone economic growth would slow from 3.1% this year to only 0.3% in 2023, which implies the 19-nation shared currency bloc would spend at least part of the year in a recession, defined as two straight quarters of contraction.

That marked a dramatic downgrade from the OECD’s last economic outlook in June, when it had forecast the eurozone’s economy would grow 1.6% next year.

The OECD was particularly gloomy about Germany’s Russian-gas-dependent economy, forecasting it would contract 0.7% next year, slashed from a June estimate for 1.7% growth.

The Turkish economy is expected to grow 5.4% year-over-year this year, up from OECD’s June forecast of 3.7%. The organization kept its view for the economy’s 2023 growth at 3%.

Türkiye’s economy expanded by a better-than-expected 7.6% year-over-year in the second quarter on strong domestic demand and exports. The growth rate made Türkiye the second-fastest growing economy in the G-20.

The OECD also revised its forecast downward for Türkiye’s inflation, expecting it to end 2022 at 71%. However, the annual consumer price index (CPI) topped 80% in August, a fresh 24-year high.

The OECD warned that further disruptions to energy supplies would hit growth and boost inflation, especially in Europe where they could knock activity back another 1.25 percentage points and boost inflation by 1.5 percentage points, pushing many countries into recession for the full year of 2023.

"Monetary policy will need to continue to tighten in most major economies to tame inflation durably," Cormann told a news conference, adding that targeted fiscal stimulus from governments was also key to restoring consumer and business confidence.

"It’s critical that monetary and fiscal policy work hand in hand," he said.

Though far less dependent on imported energy than Europe, the United States was seen skidding into a downturn as the U.S. Federal Reserve (Fed) jacks up interest rates to get a handle on inflation.

The OECD forecast that the world’s biggest economy would slow from 1.5% growth this year to only 0.5% next year, down from June forecasts for 2.5% in 2022 and 1.2% in 2023.

Meanwhile, China’s strict measures to control the spread of COVID-19 this year meant that its economy was set to grow only 3.2% this year and 4.7% next year, whereas the OECD had previously expected 4.4% in 2022 and 4.9% in 2023.

Despite the fast deteriorating outlook for major economies, the OECD said further rate hikes were needed to fight inflation, forecasting most major central banks’ policy rates would top 4% next year.

With many governments increasing support packages to help households and businesses cope with high inflation, the OECD said such measures should target those most in need and be temporary to keep their costs down and not further burden high post-COVID debts.