US inflation will average over 7% this year as the conflict between Russia and Ukraine exacerbates supply problems, the forecasting firm said

The Russian-Ukrainian conflict could shave around $1 trillion worth of global economic output, a leading forecaster said on Wednesday.

This was announced by the London-based National Institute of Economic and Social Research The conflict could reduce the level of global GDP by 1% in 2023and contribute up to 3% in 2022 and another 2 percentage points to global inflation in 2023.

According to the report, the main impacts of the Russia-Ukraine conflict on the global economy are higher energy prices, weaker confidence and financial markets, and the heavy international sanctions against Russia.

While sanctions costs for Russia are partially offset by higher NG00 gas prices,
+1.00%
and oil CL.1,
+2.35%
Exports, the net effect on the economy will be negative as Russia’s GDP is expected to contract by 1.5% this year and more than 2.5% by the end of 2023. Russian inflation is expected to exceed 20%.

In the US, the NIESR now expects average inflation of 7.1% this year, versus a previous estimate of 4.6%, and inflation growth of 3.5% next year, versus a previous estimate of 2.5% .

https://www.marketwatch.com/story/the-russia-ukraine-conflict-could-slash-global-growth-by-1-trillion-forecasting-firm-says-11646241590?rss=1&siteid=rss US inflation will average over 7% this year as the conflict between Russia and Ukraine exacerbates supply problems, the forecasting firm said

Brian Lowry

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