Global economic consequences of the military-political crisis in Ukraine

Abstract

Introduction. Economic growth will slow down significantly. The global industrial sector will be affected by worsening economic forecasts and sharp changes in energy prices. However, global supply chain issues are expected to ease, helping to ease the global manufacturing sector. Problem. Companies will face a volatile and challenging business environment given the various economic challenges. High inflation and economic instability will hold back consumer spending. The aim of the article is to install the impact of the global economic environment on economies, cities, businesses, and consumers. Methods. The methodological basis is general and special methods, including systematic approach, statistical and economic-logical methods. Results. In 2022, the world economy experienced another serious shock – Russia's large-scale invasion of Ukraine. In addition to the global impact of the COVID-19 pandemic, the war has led to severe disruptions in energy and food supplies, causing a global spike in inflation. This has led not only to a worsening of the outlook, with global real GDP growth expected to slow, but also to an entirely new economic reality that businesses and consumers will face, characterized by a host of challenges, risks, and crises that will lead to uncertainty. Conclusions. The war in Ukraine and broader geopolitical tensions pose a key risk to economic growth in 2023. The world economy is facing a new reality amid conflict, high inflation, and rising interest rates; the labor market remains tight; pressure on commodity prices will ease, but risks of increased volatility and supply disruptions remain; global supply chains are expected to recover in 2023 despite existing risks.