London: The value of the conflict in Ukraine could knock up to $1 trillion Global Economy And add 3% to global inflation this year by triggering another supply chain crisis, according to the UK’s National Institute for Economic and Social Research.
The London-based researcher said supply problems would slow growth and drive up prices, reducing global GDP levels by about 1 percent by 2023. Europe relations Russia And Ukraine, which is a major source of commodities and energy, exposes it more than any other region.
The NIESR said the war would force European governments to borrow more to pay for the influx of migrants and strengthen their armies. It urged central banks to “raise interest rates only gradually while they assess the impact on real income, through energy, on confidence and activity of war and its squeeze.”
“Conflict in Ukraine puts more economic stress on a system” covidJagjit Chadha, Director, NIESR said. “The supply chain will be further fragmented, and monetary and fiscal policies will be put under a severe test.”
Russia will avoid a recession because the economic damage from sanctions will be “partially offset by higher prices for gas and oil exports.” However, GDP will be 2.6% lower than previously estimated by the end of 2023, with a fall in the ruble pushing inflation to 20%.
According to the researcher, the hit to Russian GDP is only marginally worse than that of the eurozone and the UK, both of which will be around 1.5% lower than previous forecasts with GDP levels in 2023. As growth slows, the cost of living crisis will intensify, NIESR warned. UK inflation will average 7% this year and could fall to 4.4% in 2023.
Should sanctions be extended to cut Russian natural gas and oil shipments, the hit for Russia would be “severe” but would also increase the “likely of recession with significantly stronger inflation” in the EU. The block gets 40% of its gas from Russia.
The London-based researcher said supply problems would slow growth and drive up prices, reducing global GDP levels by about 1 percent by 2023. Europe relations Russia And Ukraine, which is a major source of commodities and energy, exposes it more than any other region.
The NIESR said the war would force European governments to borrow more to pay for the influx of migrants and strengthen their armies. It urged central banks to “raise interest rates only gradually while they assess the impact on real income, through energy, on confidence and activity of war and its squeeze.”
“Conflict in Ukraine puts more economic stress on a system” covidJagjit Chadha, Director, NIESR said. “The supply chain will be further fragmented, and monetary and fiscal policies will be put under a severe test.”
Russia will avoid a recession because the economic damage from sanctions will be “partially offset by higher prices for gas and oil exports.” However, GDP will be 2.6% lower than previously estimated by the end of 2023, with a fall in the ruble pushing inflation to 20%.
According to the researcher, the hit to Russian GDP is only marginally worse than that of the eurozone and the UK, both of which will be around 1.5% lower than previous forecasts with GDP levels in 2023. As growth slows, the cost of living crisis will intensify, NIESR warned. UK inflation will average 7% this year and could fall to 4.4% in 2023.
Should sanctions be extended to cut Russian natural gas and oil shipments, the hit for Russia would be “severe” but would also increase the “likely of recession with significantly stronger inflation” in the EU. The block gets 40% of its gas from Russia.