The world is paying a price for Russia’s war in Ukraine. The war has set the global economy on a course of slower growth and rising inflation – a situation not seen since the 1970s.
According to OECD, global GDP is now projected to slow sharply this year to around 3%. Growth is set to be weaker than expected in almost all economies. Countries worldwide are being hit by higher commodity prices, which addd to inflationary pressures and curb real incomes.
High food and energy prices and the continued worsening of supply-chain problems imply that consumer price inflation will peak later and at higher levels.
Russia and Ukraine are important suppliers in many commodity markets. Together they accounted for about 30% of global wheat exports, 20% for corn, mineral fertilisers and natural gas, and 11% for oil. Prices for these commodities increased sharply during the war.
More in the report OECD Economic Outlook, June 2022