Global economic growth is slowing due to decades of high inflation, the OECD said on Tuesday, calling for “substantial” further monetary tightening and “more targeted” government support.

Global GDP is expected to grow 3.1 percent this year — nearly half the rate last year, the Organization for Economic Co-operation and Development said.

The decline is expected to continue next year, with global growth set to slow to 2.2 percent before picking up “to a relatively modest 2.7 percent in 2024,” the Paris-based organization said.

Amid the fallout from Russia’s war in Ukraine, “growth has lost momentum, high inflation is proving persistent, confidence has waned and uncertainty is high,” according to its latest forecasts.

“An end to the war and a just peace for Ukraine would be the most effective way to improve the global economic outlook,” said OECD Secretary-General Mathias Cormann during a news conference.

OECD chief economist Alvaro Santos Pereira said in the report the global economy was “staggered by the biggest energy crisis since the 1970s”.

The energy shock has pushed inflation “to levels not seen in many decades” and hit economic growth around the world, he added.

Inflation was already rising before the conflict due to bottlenecks in the global supply chain after countries emerged from Covid lockdowns.

But the OECD said inflation in the top 20 group of economies will reach 8 percent in the fourth quarter of this year and fall to 5.5 percent in 2023 and 2024.

Cormann said inflationary pressures were easing but urged central banks to speed up rate hikes.

“We expect inflation to moderate gradually as monetary policy tightens, pressures on demand and energy prices ease over time, and transportation costs and delivery times continue to normalize,” he told reporters.

However, he stressed there remains a possibility that “economic activity could weaken further if energy prices continue to rise or if energy disruptions hit gas and power markets in Europe and Asia”.

Tackling inflation is a “top policy priority,” the OECD said, as rising prices erode people’s purchasing power around the world.

“Our central scenario is not a global recession, but a significant slowdown in global economic growth in 2023 and still high, albeit declining, inflation in many countries,” said Santos Pereira.

The OECD recommended tightening monetary policy in countries where inflation remained high.

It also advocated targeted support for families and businesses to avoid worsening inflationary pressures, as energy costs “are likely to remain high and volatile for some time”.

“In these difficult and uncertain times, policy plays a crucial role again: further monetary tightening is essential to fight inflation and fiscal support should become more targeted and temporary,” the OECD said.

Cormann acknowledged that government support has helped cushion the impact of high energy costs on homes and businesses.

But he said the support must be “temporary and more targeted”.

“This would make it possible to minimize tax costs, focus on the most vulnerable and retain the incentives to reduce energy use and boost investment in additional supplies,” he said.

The OECD called for more targeted support of this type, particularly in France and Germany.

Europe’s largest economy is only expected to grow by 1.8 percent this year, while the OECD is forecasting growth of 2.6 percent for France.

And in the UK, following the economic chaos under short-lived ex-Prime Minister Liz Truss, the OECD called on the government of her successor, Rishi Sunak, to ensure future fiscal targets are clear and transparent to ease concerns about debt sustainability.

The 38-strong group called for accelerating investment in adopting and developing clean energy sources and technologies to diversify supply.

Gas and oil supplies from major producer Russia have been severely disrupted following its invasion of Ukraine. Western allies sanctioned its energy exports and Russia cut supplies amid the standoff over the conflict.

The upheaval has pushed up energy costs and fueled decades of inflation in major economies, prompting central banks to raise interest rates to tame runaway prices.