What You Need to Know The war in Ukraine won’t impact every country the same, but it will be felt disproportionately in Europe and in those emerging markets with exposure to Russia and Ukraine. The outlook is less grim beyond Eastern Europe, though knock-on effects of the conflict will persist.
Key Forecast Trends The magnitude of the war’s impact on growth and inflation will be determined by how much and for how long energy prices rise. The war, economic sanctions and the associated rise in energy costs are likely to exacerbate global shipping impediments, too, which had begun to recover from the pandemic. We expect most central banks to continue tightening monetary policy, even as consumers face a hit to real incomes from rising energy prices. Perspective is important: the reopening from COVID-19 pushed global economic growth well above long-term trends, and US households in particular now have a reservoir of savings that will allow them to smooth consumption through trying times. facebook linkedin twitter youtube email print