Ukraine gdp 202010/3/2023 ![]() ![]() We continue to expect higher commodity prices because of the disruption to food and other exports from Ukraine, and the sanctions imposed on exports from Russia. The overall effect on Russia’s GDP will not be cushioned entirely by the country’s higher revenues from energy exports. The war will contribute to a deep Russian economic recession, with GDP set to shrink by 12 percentage points in 2022 compared with the Winter 2022 estimates (that is, -9.1% in 2022 compared with +3.2% forecast in February for the same year), and contracting by a further 11% in 2023. GDP in Europe is expected to shrink by more than 1% in 2022 compared with the forecast base (Figure 1). Europe is still going to be the region affected most, given trade links and reliance on energy and food supplies, as well as its proximity to Ukraine. The war is also expected to shrink the Ukrainian economy by more than 30% and reduce global GDP by about 1% in 2022. In NIESR’s Spring 2022 Global Economic Outlook, we quantified these transmission channels using the National Institute Global Econometric Model (NiGEM).Īccording to the model, Russian GDP will contract by more than 10% in 2022, compared with our Winter (pre-conflict) 2022 baseline. The impact of the conflict on commodity prices, and thus household expenditure, is more relevant than the risk of contagion from other countries' trade links. There are growing concerns around supply chain problems for users of these materials, including car, smartphone and aircraft manufacturers. Russia and Ukraine are important suppliers of certain commodities, including titanium, palladium, wheat and corn. While Ukraine is not a significant trading partner for any major economy, Russia has a great exposure to the European Union (EU).
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