Russia’s invasion of Ukraine is likely to cost the global economy $2.8 trillion in lost output by the end of 2023, according to an Organization for Economic Cooperation and Development (OECD) report.
In a report about the global economy, OECD projected the global growth will remain subdued in the second half of 2022 before slowing further in 2023 to 2.2%.
The key factor slowing global growth is the tightening of monetary policy, driven by the greater-than-expected inflation targets.
The estimate sums up the magnitude of Russia’s invasion of Ukraine in February.
The attack has induced a surge in energy prices and has weakened business sentiment around the world, especially in Europe.
Even though gas storage levels in the European Union have been raised to almost 90% of capacity, it is not a guarantee that it will withstand the winter demand.
Without sufficient supply diversification and orderly demand reductions, shortages could push up global energy prices, said the OECD, leading to drastic measures like temporary gas rationing.
The war-related shocks, OECD added, could push many European countries into a recession in 2023.
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