The mid-term forecast reveals how the conflict has upended the fragile economic recovery from the Covid-19 pandemic, causing a humanitarian crisis in Europe, soaring food and commodity prices, and exacerbating inflationary pressures.
Global inflation is also expected to reach 6.7% this year, double the average of 2.9% recorded between 2010 and 2020, with sharp increases in food and energy prices.
“The war in Ukraine – in all its dimensions – is triggering a crisis that is also devastating global energy markets, disrupting financial systems and exacerbating the extreme vulnerabilities of the developing world,” said the United Nations Secretary-General, during of his intervention.
The deterioration in growth prospects concerns the world’s largest economies – the United States, China and the European Union – as well as the majority of other developed and developing economies.
Rising energy and food prices are particularly affecting developing economies that import commodities, and the outlook is worsened by growing food insecurity, particularly in Africa.
Almost a quarter of Europe’s energy consumption in 2020 came from oil and natural gas imported from Russia, and a sudden stop in flows is likely to lead to higher energy prices and inflationary pressures.
EU member states in Eastern Europe and the Baltic region are badly affected as they are already experiencing inflation rates well above the EU average.
