According to a World Trade Organization (WTO) analysis, Russia’s war against Ukraine could cost global economic growth up to 1.3 percentage points this year.
According to the model’s calculations, gross domestic product is only expected to grow by 3.1% to 3.7% in 2022, the WTO in Geneva said in an analysis of the war’s consequences for trade. The organization cites higher food and energy prices and falling exports from Russia and Ukraine as the reason. “The poorest countries are exposed to great risks of war because they spend a greater part of their income on food than the richest countries,” he said. “This could have consequences for political stability.”
Notice of division into commercial blocks
In October, the WTO still expected world trade to grow by 4.7% this year. According to new calculations, this could be reduced by almost half, according to the WTO. It’s not just about Russian and Ukrainian exports of energy, grain and sunflower products. Russia is one of the main suppliers of palladium and rhodium for the production of catalytic converters for cars, Ukraine supplies neon for the semiconductor industry.
“Europe, as the main buyer of Russian and Ukrainian exports, will feel the economic impact most severely,” according to the WTO. The organization warns of negative consequences if the global economy splits into trading blocs and countries focus more on self-sufficiency in production and trade. This hurts competition and stifles innovation. The consequences would be particularly serious for developing and emerging countries.