War in Ukraine Is Setting Back the Global Economy

The world economy entered 2022 with expectations of a strong post-pandemic recovery. However, the war in Ukraine is affecting global economic prospects in all its dimensions to a significant extent. Having triggered a surge in commodities prices, the conflict is threatening food security in many parts of the world, intensifying financial stress, straining global supply chains and generally exacerbating high uncertainties worldwide.

All major international organizations, such as the IMF, the World Bank, the OECD and the UN, have revised their forecasts of global economy growth in 2022 downward by around one percentage point in comparison to their pre-war projections. In addition to lower growth, inflationary pressures are strongly felt in many countries, reaching the highest levels seen in many years in major economies, according to the OECD Economic Outlook June 2022.

Our latest country reports show that, due to the war, most countries in the world will experience lower growth, higher inflation, or both, and the consequences are projected to be long-lasting and vary significantly across countries, depending on their economic ties with Russia and Ukraine.

Article and chart by our analyst Huu-Tam Nguyen