Brussels 22 March 2022 – With the Russia-Ukraine war entering its fourth week, growth forecasts for the European economy are down by 1%, while inflationary pressures are rising fast. That is according to the updated global economic outlook from The Conference Board.

Sara Murray, Managing Director, International for The Conference Board, said:

“Russia and Ukraine are key providers of a lot of the world’s commodities. In Europe, we produce only 13% of the gas we need for our electricity and import 67 % from Russia. With prices jumping from the historic lows of €16 per Megawatt in 2021 to over €250 per Megawatt in light of the war, businesses and consumers alike will feel the intense pressure of price inflation.”  

Some of the likely knock-on effects that The Conference Board anticipates include firms in Europe curtailing production; reduction in consumer spending power; and reduced investments; as well as shortages of key inputs for businesses.

“While we don’t anticipate a global recession as a result of Russia’s invasion, we do expect the economies of Russia and Ukraine to shrink. Europe will be most exposed to this recessionary impact, with growth rate forecasts lowered by 1% for the Euro area. Simultaneously, inflation figures are 1% to 1.5% higher than expected at the start of the year. We need to brace ourselves for a high price environment for the next two years,” Ms. Murray added.

Media Contact

Marie-Jeanne.Merillet@tcb.org

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