World economy in spring 2022: Slower growth amid higher inflation

The war in Ukraine is weighing on the global economy at a time when inflation has already risen sharply and the US Federal Reserve has embarked on a tightening cycle. Higher commodity prices are adding to inflationary pressures and combined with the adverse impact of sanctions on transportation times and supply chains, are likely to lead to a renewed increase in supply disruption in the coming months. We revised our forecast for global growth significantly downwards compared to our previous estimates by 1 percentage point this year and a 0.4 percentage in 2023. Nevertheless, global output (measured on a purchasing power parity basis) in 2022 and 2023 will still be rising at above trend rates of 3.5 and 3.6 percent, respectively. The economic expansion therefore remains robust on the back of recovery from the impacts of Covid-19. However, in addition to the uncertainties surrounding the Ukraine conflict, Covid-19 is still a substantial risk for the economic outlook. In particular, the potential spreading of the Omicron variant in China could reduce global growth if production in China was severely hampered by containment measures