Russia-Ukraine war to hamper EU's economy, lower global growth

Deloitte said in a recent report that the war is not likely to derail post-pandemic US economic recovery but will push up inflation in the short run. Europe’s heavy dependence on Russian natural gas suggests that the EU’s economy will experience slower growth—or, in the extreme case, a recession. The crisis is likely to make things more difficult for US exporters.

Inflation and related problems, such as tangled supply chains, may continue to challenge business leaders and policymakers, but the US economy is performing well by most measures, Deloitte said in a note.

In an update to its Trade and Development report published on March 24, UNCTAD said the ongoing war in Ukraine is likely to reinforce the monetary tightening trend in advanced countries following similar moves that began in late 2021 in several developing countries due to inflationary pressures, with expenditure cuts also anticipated in upcoming budgets.

While Russia will witness a deep recession this year, significant slowdowns in growth are expected in parts of Western Europe and Central, South and South-East Asia, it said.

UNCTAD is worried that a combination of weakening global demand, insufficient policy coordination at the international level and elevated debt levels from the pandemic, will generate financial shockwaves that can push some developing countries into a downward spiral of insolvency, recession and arrested development, the UN body said in a release.

Fibre2Fashion News Desk (KD)