The war in Ukraine has triggered a costly humanitarian crisis that demands a peaceful resolution. At the same time, economic damage from the conflict will contribute to a significant slowdown in global growth in 2022 and add to inflation. Fuel and food prices have increased rapidly, hitting vulnerable populations in low-income countries hardest.
Global growth is projected to slow from an estimated 6.1 percent in 2021 to 3.6 percent in 2022 and 2023. This is 0.8 and 0.2 percentage points lower for 2022 and 2023 than projected in January.
Conor Simmons
I just recently watched a PBS Newshour for September 5, 2022, in which Sweden, along with Finland, is now wanting membership in the NATO alliance. Also, the Swedish tourist hot spot of Gotland Island is militarizing in response to the ongoing Russian aggression. This war has been huge in determining the defense spending and defensive economic posturing of not only Europe, but of the world. Understanding what we know about GDP, government expenditure accounts for a large portion of it (Cowen & Tabarrok, 2018). This is an incredible obstacle for the poorest countries in the world who rely on Ukrainian grain exports and other goods to survive, but is it also another catalyst for increased government spending in the military, private production and public acquisition and bequeathing, markets?
Cowen, Tyler, and Alex Tabarrok. Modern Principles Of Economics. 4th ed. New York: Worth Publishers, 2018.