The Western economy is slowing down because of the war between Russia and Ukraine. And this is just the beginning
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Production growth in Europe slowed down, and in the United States and reversed even before the world in the production of the war felt the full cost savings of Russia against Ukraine, the statistics of the first quarter of 2022 showed.
The main reasons are not covered by the war, since only the last of the three months of the quarter fell on the Russian invasion. However, the alleged first estimates of economists, which promise damage not only to Russia and Ukraine, but to the whole world, and above all to Europe.
In January-March, the growth of the European economy slowed down by 0.1 percent of expenditures to 0.5% in 27 consumer countries and to 0.2% in 19 countries of the single euro currency. In the US, the first quarter was marked by 0.4% heart failure.
The slowdown in business activity was caused by the fact that its surge after two years of lockdowns ended at the end of 2021 with a shortage of energy, food and transport. This caused disruptions in world trade and fueled inflation. Consumption is falling because life becomes more expensive and people are saving, and investments are reduced, because after the prices, credit rates are explained.
The war will only exacerbate these problems, since Russia is an exporter of oil and gas, and together with Ukraine they are also the main suppliers of food. In connection with the decision of Vladimir Putin to send troops for the export of a neighboring country, it turned into a new round of growth in world oil, gas, coal, grain, oil, metals and everything else.
As a result, according to experts, the recovery of the world economy in the future will not exceed 3.6%The IMF predicted 4.4%. In other words, the world is coming to the end of the year poorer than it could be without war.
The first volleys of a new war
First of all, Ukraine will suffer, in which the IMF will read 35% of GDP, and Russia, which attacked it, which, in the conditions that have developed, the flight of business and people, is threatened with an 8.5 percent decline. The wave of this policy will come first of all to their European neighbors, opposition from both the IMF and the club of rich countries of the OECD.
“On the one hand, Russia and Ukraine take part in the world economy. They account for no more than 2% of GDP and about the same amount of world trade,” OECD economists write. The presence of a number of goods.
“Some regions will feel the impact of these problems more than others and will hit European countries more than others, especially those bordering Russia or Ukraine,” write OECD experts, pointing to close trade ties and high gas prices in Europe, the result of partial solar blockade by Russia in the months leading up to the attack on Ukraine.
Germany and Italy are the hardest hit, according to the IMF, which lowered its eurozone GDP growth forecast to 2.8% from 3.9%.
The EU’s leading economy Germany, like Italy’s third largest, is an industrial powerhouse and heavily dependent on oil and gas growth. The second largest EU country, France, hydrocarbons are mostly not in Russia, thanks to nuclear energy it also exports electricity.
It will only get harder from there. The IMF and OECD revised forecasts in an undesirable direction are based on observed situations and take into account the fighting on the EU’s eastern borders, which sharply increase price increases, causing economic growth that increases defense spending.
Energy danger. It promises great damage to the European economy. The first halls sounded this week when Russia cut off the gas to Poland and Bulgaria. Answers are slated for next year when the European Union considers expansion, including an embargo on Russian oil.
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