The world economy will take a bigger hit than previously forecast next year due to the effects of Russia's war in Ukraine, the Organization for Economic Co-operation and Development said Monday.

In a bleak report titled "paying the price of war", the Paris-based organization noted that the conflict aggravated inflationary pressure when the cost of living was already rising quickly.

Covid outbreaks are still having an impact on the global economy while growth has also been affected by rising interest rates as central banks scramble to cool red-hot prices, the OECD said.

"A number of indicators have taken a turn for the worse, and the global growth outlook has darkened," the OECD said in the report.

Global growth stalled in the second quarter of this year and data in many economies "now point to an extended period of subdued growth", the OECD said.

The organization slashed its 2023 growth forecast for the global economy to 2.2 percent, down from 2.8 percent in its previous estimate in June.

German recession

The outlook for nearly all nations in the Group of 20 top economies was cut, except for Turkey, Indonesia, and Britain, though the latter is forecast to have zero growth.

Growth in the United States — the world's biggest economy — is forecast to slow to 0.5 percent in 2023.

The growth forecast for China, whose economy has been hit by strict Covid lockdowns, was cut sharply for this year to 3.2 percent while it was slightly lower to 4.7 percent for 2023.

Germany is now expected to go into recession next year with Europe's biggest economy now seen shrinking by 0.7 percent — a 2.4-percentage-point drop from the previous forecast.

The country's economy has been hit the hardest in Europe as it has relied heavily on Russian supplies of natural gas, which Moscow has cut significantly in suspected retaliation to Western sanctions.