OECD warns of reduced economic growth and higher prices in the wake of the war in Ukraine

KronerPhoto: Gorm Kallestad / NTB
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The war in Ukraine will disrupt global trade, push prices up, and lead to reduced economic growth, the OECD warns in a new analysis.

The new assessment from the organization, which consists of 38 of the world’s most developed economies, is alarming. It estimates that the conflict in Ukraine will reduce gross domestic product (GDP) by 1.08% worldwide.

For the 19 euro countries, the OECD estimates a weakening of GDP of 1.4%, while estimates for the United States include a reduction of 0.88%. In Germany, the Institute for the World Economy (IfW) has almost halved its forecast for economic growth in Germany from 4% to 2.1%.

At the same time, the organization says that public spending and tax cuts can limit the economic ripple effects of the war.

As a result of rapid growth in the wake of the corona pandemic, prices were already rising, and supply chains were struggling ahead of the invasion of Ukraine in February.

In December, the OECD estimated a price increase of 4.2% this year. Now they predict that the conflict in Ukraine will add 2.47% to global inflation.

Source: © NTB Scanpix / #Norway Today / #NorwayTodayFinance

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