We warned at the start of the year that global growth would disappoint, while inflation would surprise to the upside in 2022 and recent events have added to those concerns. The surge in commodity prices related to the war in Ukraine means that headline inflation will be even higher than we previously expected around the world. The hit to real incomes and disruption to trade and energy supply has led us to revise down our GDP forecasts for some economies, particularly the rest of emerging Europe and the euro-zone. The war could also cause renewed supply shortages, with reports already emerging of shortages of wheat, vegetable oils, certain metals, and electronic components. What’s more, rising virus numbers and renewed restrictions in China threaten to make matters worse, all suggesting that previous signs of improvement in our G7 Shortages Indicators are unlikely to be sustained.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services