(Illustrative photo)

The Outlook projects global growth at a modest 3% this year before slowing further to just 2.2% in 2023. This is well below the pace of economic growth projected prior to the conflict and represents around 2.8 trillion USD in foregone global output in 2023.

The dispute has further pushed up energy prices, especially in Europe, aggravating inflationary pressures at a time when the cost of living was already rising rapidly around the world due to lingering impacts of the COVID-19 pandemic.

With businesses across many economies passing through higher energy, transportation and labour costs, inflation is reaching levels not seen since the 1980s, forcing central banks to rapidly tighten monetary policy settings faster than anticipated.

Annual GDP growth is projected to slow to around 1/2% in the United States in 2023, and 1/4% in the euro area, with risks of deeper declines in several European economies during the winter months. Growth in China has also been hit and is expected to drop to a projected 3.2% in 2022. Except the 2020 pandemic, this will be the lowest growth rate in China since the 1970s.