Russia's War in Ukraine to Cost Global Economy $2.8 Trillion, OECD Says

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Russia’s War in Ukraine to Cost Global Economy $2.8 Trillion, OECD Says

Research body says loss of output could be larger if Europe faces energy shortages during a severe winter

By Paul Hannon
https://twitter.com/PaulHannon29
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Updated Sept. 26, 2022 9:28 am ET

Russia’s invasion of Ukraine will cost the global economy $2.8 trillion in lost output by the end of next year—and even more if a severe winter leads to energy rationing in Europe—the Organization for Economic Cooperation and Development said Monday.

The estimate by the Paris-based club of advanced economies lays bare the magnitude of the economic fallout from Moscow’s invasion of its neighbor seven months ago, the biggest military conflict on the continent since World War II, as Russia’s attempts to redraw the map of Europe by force.

Russia’s attack has sparked a surge in energy prices that has weakened household spending and undermined business confidence, particularly in Europe. The conflict has dislocated supply chains, caused shortages of food and other essentials and shaken markets across the globe.

Western governments fear that Russia’s order of a partial mobilization and its preparations to annex swaths of Ukraine could prolong the conflict for many months, perhaps years, further fueling the uncertainty now weighing on the global economy. ... “We are paying a very hefty price for the war,” said Álvaro Santos Pereira, the OECD’s acting chief economist. ... In its latest forecasts, the OECD said the global economy was set to grow by 3% this year and 2.2% next year. Before the war, it had expected growth of 4.5% in 2022 and 3.2% in 2023.

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