According to the Organisation for Economic Co-operation and Development’s (OECD) analysis of the Russia-Ukraine crisis’ possible impacts on the global economy and trade, the world economy's growth performance may remain 0.95 to 1 point lower than projections at the beginning of the year. Projections on global inflation, meanwhile, indicate that an increase of between 1.6 and 1.75 points may be experienced. The statistics also show that eurozone economic growth may decline by 1.1 points, OECD members could see a decline of 0.9 points and the U.S. economy could see a loss of 0.8 points.

Excluding Russia, the expected loss in global growth seems to have settled at 0.7 to 0.75 points in leading developing countries, including Turkey, due to production and export efforts. The increase in global commodity prices caused by the Russia-Ukraine tension and the trouble Moscow will stir in domestic inflation rates and financial markets stand out as the headlines that will force global inflation to deviate from earlier projections. Looking at inflation across different geographies with these two reasons in mind, the possible deviation in the average annual inflation rate of the eurozone appears to be between 1.7 and 1.75 points, which is also equal to the possible deviation calculated for global inflation.

A 1.4-point potential deviation in inflation rates in OECD member countries has been forecast, while the deviation in U.S. annual inflation has been put at between 1.2 and 1.3 points. Excluding Russia, a deviation of between 1.5 and 1.55 points from the global inflation rate in the entire world economy is expected.

It appears that Russia's domestic economic problems, which are likely to increase with sanctions, will have a very limited lowering effect on inflation rate deviations in the U.S., OECD member states and the eurozone. On the other hand, the consequences of Russia's possible economic issues are expected to increase the deviation in global inflation between 0.25 and 0.30 points.

The OECD also offers effective fiscal policy support to all member countries and, in general, to the world’s leading countries in order to protect their economies from the effects of the Russian-Ukrainian tension and reduce possible negative consequences. Meanwhile, when it comes to global trade, it is difficult to make a prediction at this stage. Can various agricultural products, mining products and metals, which Russia and Ukraine play an important role supplying to the world, be replaced by other countries? Can a possible disruption in the global supply chain be avoided? It seems wiser to wait until the beginning of summer to see the possible implications on global trade.

2022 global growth at risk

On a regional and global scale, the Russia-Ukraine tension has deeply impacted the prices of commodities, from agriculture and food to metal and energy. Russia and Ukraine are important suppliers of agricultural and food products, machinery and parts, raw and processed metals and energy derivatives. An increase in the prices of these commodities threatens to plunge the world economy, which was already struggling to heal from the wounds inflicted by the coronavirus pandemic, into another global recession. The war has added to the global and regional troubles being faced due to a shortage of containers, disruptions in shipments and logistical difficulties in acquiring raw materials caused by the pandemic.

The conflict between the countries threatens to slow down the supply and shipment of agricultural products, food, the products of mining, metal, energy and raw materials needed in technology, in addition to the intermediate and final products they produce, thus making 2022 a "year of struggle" against global inflation and recession. As for Turkey, a challenging year lies ahead, one in which we will mobilize all our domestic and national resources to demonstrate the extent of our capabilities.