If there would have been no Russia-Ukraine conflict, the global economy would have been 1.6 trillion U.S. dollars richer in 2022, according to a study published by the German Economic Institute (IW). This conflict is of a high global economic significance as energy and raw material supply problems were putting pressure on companies worldwide. Major economies were affected particularly western as they lost two-thirds of their global production.
In Germany, Europe’s largest economy, increasing energy prices pushed soaring inflation above the 10 percent mark in 2022, but, however the relief measures brought prices down again. Due to these increasing prices, the cost at the production level surged immensely, which became a burden difficult to calculate for many companies. As a result, the purchasing power of the lay-man deteriorated completely. Finally, companies were reluctant to invest due to the global uncertainty and higher prices.
For 2023, an additional global loss of 1 trillion U.S. dollars is also recorded. And, Unfortunately, there is no silver-lining, yet in sight as raw material shortages and uncertainty would continue to occupy us beyond 2023 and cost prosperity.
The International Monetary Fund (IMF) last month raised its forecast for the global economy in 2023 slightly, expecting growth of 2.9 percent instead of 2.7 percent. Because of China’s recent reopening, opportunity has paved the way for a faster-than-expected recovery.
