The Russian invasion came at a time when prices were already rising and supply chains stalled due to an unexpectedly strong recovery from the coronavirus recession. The OECD, which forecast global inflation of 4.2 percent this year in December, predicted the conflict would push prices up globally by 2.47 percentage points over the next year.
Russia’s war in Ukraine will disrupt trade and clog supply chains, curb economic growth and sharply push prices around the world, the Organization for Economic Co-operation and Development warned Thursday.
In a stark new assessment, the 38-nation OECD said the conflict would cut gross domestic product — the broadest measure of economic output — by 1.08 percent globally over the next year, with 1.4 percent in the 19 European countries that hit the country. euro and by 0.88 percent in the United States.
But government spending and tax cuts could partially mitigate the damage, the organization said.
The Russian invasion came at a time when prices were already rising and supply chains stalled due to an unexpectedly strong recovery from the coronavirus recession. The OECD, which forecast global inflation of 4.2 percent this year in December, predicted the conflict would push prices up globally by 2.47 percentage points over the next year.
Russia and Ukraine account for less than 2 percent of global GDP, but are heavyweight producers of specific commodities.
For example, together they export a third of the world’s wheat, raising concerns that countries like Egypt and Lebanon, which depend on affordable wheat exports for bread and other staple foods, could face shortages in the coming months.
Russia is also a major producer of potassium used in fertilizers, palladium essential for cars, mobile phones and dental fillings, and nickel used in electric car batteries and steel.
The prices of those commodities have risen since January.
Hit by sanctions, Russia and its economy took a huge hit. The ruble has plummeted in value and Russian oil is being sold at a huge discount on world markets.
This post War in Ukraine will take global economic toll, group warns
was original published at “https://www.financialexpress.com/economy/war-in-ukraine-will-take-global-economic-toll-group-warns/2464281/”
