The global recovery from the pandemic will be dented but not derailed if high energy prices persist throughout 2022, according to Oxford Economics’ modeling. In an extreme scenario where oil, gas and coal prices remain elevated indefinitely, global growth would still be 4 percent and 2.8 percent in 2022 and 2023, respectively, knocking 0.5 percentage points and 0.7 percentage points off Oxford Economics’ baseline forecast.
Using the Oxford Economics Global Economic Model to create the scenario, the report found that while some economies would suffer sizable GDP impacts, the global impact is more moderate. This is explained by the price shocks being modest in a real and historical context, and the falling fossil fuel intensity of GDP.
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