Economic and Social Impacts and Policy Implications of the War in Ukraine
The war Russia is waging in Ukraine is a humanitarian disaster. Beyond this, the economic damage is already being felt worldwide and risks becoming increasingly severe and long-lasting.
Russia’s invasion of Ukraine on 24 February has thrown the growth recovery from the COVID 19 pandemic into doubt and has sewn catastrophe across the region, destroying lives, homes and infrastructure. The ramifications are being felt worldwide.
Support needed for refugees
Already more than 3 million people have fled Ukraine with more waves of refugees expected in the weeks ahead. So far, refugees have primarily gone to a small number of neighbouring countries. Burden sharing and EU support to the major host countries will be needed for support to be delivered more effectively and sustainably.
Weaker economic growth, higher inflation
Amid the uncertainty, the OECD estimates global economic growth could be more than 1 percentage point lower this year than was projected before the conflict, while inflation, already high at the start of the year, could be higher than it would have been if war had not broken out by at least a further 2.5 percentage points on aggregate across countries.
The chart shows the potential impact on GDP and inflation.
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