Wartime macroeconomics
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Wartime macroeconomics

Wartime macroeconomics

A fresh supply shock stemming from the war in Ukraine will deal a blow to the economic recovery from COVID-19. The energy and food sectors are especially hard hit.

World economic growth in the year ahead will now be more than 1 percentage point lower than previous projections, while inflation, already elevated at the beginning of the year, is now expected to be 2.47 pp higher than previous projections, according to OECD estimates.

The OECD believes a fiscal response targeting support for the more vulnerable of 0.5 pp of GDP could substantially mitigate the economic impact of the crisis without substantially adding to inflation.

 See War in Ukraine: Economic and Social Impacts, and Implications for Policy

 

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