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The global economy will lose $1 trillion a year due to Russia’s war in Ukraine

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The global economy will lose $1 trillion a year due to Russia's war in Ukraine

The loss of the global economy from a full-scale Russian invasion of Ukraine could amount to about $1 trillion this year.

This is stated in the publication. Forbes U.A. citing the latest forecast by The Economist, Ukrinform reports.

“The new forecast assumes that hostilities will last at least until the end of the year. Consequently, the global growth forecast deteriorated by 1.1 percentage points to 2.8% year on year. In other words, the war lowered the global GDP forecast for this year by $1 trillion.

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At the same time, it is noted that Russia’s GDP will suffer the most among the G20 countries. By the end of 2022, its economy will fall by 10% due to sanctions, compared to an initial growth estimate of 2.6%.

As for Ukraine, the publication cites the base scenario of the NBU, according to which Ukraine’s GDP is expected to decline by 33.4% in 2022 and grow by 5.5% in 2023 and 4.9% in 2024. Inflation, according to the forecasts of the National Bank, will accelerate to 31% by the end of the year, but will slow down in the next two years – to 20.7% and 9.4%, respectively.

One of the biggest risks remains the possibility of prolonging the war. According to the pessimistic scenario, the Ukrainian economy will fall by 34.5% in 2022, but will grow by 2% and 5.6% in 2023 and 2024, while inflation will accelerate from 31.5% this year, but will fall to 19 .4% and 20.7% in the next two years.

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As Ukrinform reported, at the end of July, the IMF published the World Economic Outlook (WEO) report. In the document, the Fund predicted an even greater slowdown in the global economy in 2022-2023 than previously expected. In particular, the expectations of global GDP growth this year were reduced to 3.2%, and next – to 2.9%. Among the reasons for this trend was the long-term impact of the consequences of the pandemic, as well as the Russian invasion of Ukraine.

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