A recent report by South Korean based investment house, JK Marshall Mercantile, revealed that global economic growth will likely not reach 4% this year and next. Earlier forecasts by the group had predicted a global GDP of around 4.5% for 2022.
The report highlighted the risks to growth posed by Russia’s devastating invasion of Ukraine. The far-reaching economic effects of this war are already being felt around the globe by exacerbating price pressures and causing and increase in already rising inflation.
The report noted that while the cost to Ukraine’s economy would be the greatest, on a wider scale, the conflict will cause supply shocks to the global economy to be intensified.
Russia is one of the world’s largest suppliers of oil and gas and western sanctions on Russia for its unprovoked invasion of Ukraine means prices of these essential commodities will rise sharply.
This is added to the already problematic scenario of an economy struggling to recover and make up for lost ground in the wake of the devastating pandemic.
Ukraine supplies a large portion of the world’s wheat and corn and JK Marshall analysts say price increases of these essential goods are predicted to hurt the poorest of households, causing inflation to rise and persist for longer than previously anticipated.
JK Marshall Mercantile economists’ prediction for global economic growth echoes the sentiments of the International Monetary who believes global GDP will slow to 3.6% this year and next. This is down from earlier predictions of 4.4% for 2022 and 3.8% for 2023.