McKinsey&Company
Ukraine’s sweeping economic impact
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The great shake-up. The war in Ukraine has set off a chain of reactions that is reshaping the whole world. Some countries, particularly in Africa and the Middle East, are experiencing huge price spikes in wheat, cooking oil, and other agricultural products. The exodus of 5.8 million Ukrainian refugees, shortages of natural gas and oil, and political and military realignments mean that life is changing in profound ways across the globe. [NPR] |
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Economic repercussions. The Ukraine invasion’s domino effect on the world economy is gradually becoming clear. The IMF and World Bank have both cut global growth forecasts, citing the war’s impact on the price of commodities traditionally supplied by the region. Central banks are attempting to tame inflation with aggressive interest rate hikes, which is rattling financial markets. The situation is also intensifying supply and demand imbalances and harming consumer sentiment. [CNBC] |
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Facts and figures. In 12 charts, McKinsey examined the consequences of the war in Ukraine for society and the global economy. A few headline numbers: a key index of food prices could rise by as much as 45% this year, McKinsey analysis suggests. In 2021, Europe imported 36% of its gas from Russia; the continent could reduce this to 10% this year. About 80% of Western tech firms have exited Russia or are scaling back, while more than 60% from other parts of the world are staying put. |
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Twelve disruptions. The war’s effect on supply chains and on the future of globalization is multifaceted, dynamic, and will depend on its duration and intensity. McKinsey has put data behind our view on how several scenarios are likely to play out. “Just in time” supply chain management is giving way to “just in case” approaches. Global tech standards are now more likely to separate than to unify. Defense spending is on the rise. Explore 12 disruptions that are changing our world.
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| — Edited by Katy McLaughlin |
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