Global Economy Growth Down to 2.6% due to Russia-Ukraine War: UNCTAD

UNCTAD's Trade and Development Report 2022, released on Thursday, revealed that the ongoing Russia-Ukraine conflict has been the main contributing factor to the potentially devastating one percent drop in projected global economic growth this year.

According to the latest report issued by UNCTAD, the Director of UNCTAD Division on Globalization and Development Strategies Richard Kozul-Wright said, "The main headline is a downgrading of the projection for global growth this year."

"We anticipated back in September of last year that the global economy would grow by around 3.6 percent. We expect it to grow by 2.6 percent this year and of course, the main contributing factor to that, is the war in Ukraine."

"With inflation on the rise and developing countries already weighed down by a $1 trillion debt burden to pay back to creditors, the UN body decried the inadequate financial measures already taken to help them withstand exchange rate instability, rising interest rates, and soaring food and fuel prices," he explained.

In the same context, UNCTAD Secretary-General Rebeca Grynspan, said, "There is a rapidly worsening outlook for the world’s economy and to think that this year, the year after two years of crisis with COVID-19, the average rate of growth of the world economy will be 2.6 percent, down from 5.5 percent last year, and down from the projections that were made in the last quarter of 2021."

Moreover, Ms. Grynspan called for “emergency measures from the IMF and World Bank”, namely the activation of rapid funding instruments which IMF can provide to help countries with a looming balance of payments problems.

The UNCTAD chief added: “Conditions are worsening for everybody," noting how the climate crisis has played its part, along with successive droughts in the Horn of Africa, the ongoing COVID-19 pandemic, and war in Ukraine.

Even relatively wealthy countries that are struggling with multiple cost-of-living pressures, have already sought help from the international system to keep them afloat.