UN trade body lowers global GDP forecast due to Russia-Ukraine war

By Gokhan Ergocun

ISTANBUL (AA) - The United Nations Conference on Trade and Development (UNCTAD) lowered its global gross domestic product (GDP) forecast for 2022 on Thursday from 3.6% to 2.6% due to the Russia-Ukraine war.

In the agency’s new report, world growth estimates were hit by downside risks to supply and demand, compounded by the war in Ukraine.

"On the supply side, persistent disruptions will continue to hamper economic activity,” it said. "At the same time, macroeconomic tightening will weaken demand while rising prices will erode real incomes and dampen investor confidence."

It estimated that the Russian economy will contract 7.3% in 2022. It was predicted to expand 2.3% in a report in September. It is the largest revision among forecasts.

GDP forecast for the EU was 1.6%, down from 3.3%, while the eurozone forecast was also lowered from 3.4% to 1.7%.

Among eurozone economies, the report's estimates for Germany and France were 1.4% and 2.4%, respectively, while they were 3.2% and 3.4%.

US GDP estimate was 2.4% for 2022, down from 3%. while it was 4.8% for China, down from 5.7%.

The estimate for Turkiye was 2.5% for 2022, down from 3.6%.

"Our estimates incorporate the two main new features of the world economic situation: the war in Ukraine and tightening macroeconomic policy in developed economies," it said. "Before the outbreak of the war in Ukraine, global growth was already projected to slow in 2022 with the recovery from the pandemic shifting to more normal rates, pandemic restrictions abating and supply pressures continuing."