War could reduce global economic growth 0.25% & raise global inflation 0.75%: Wells Fargo

Here’s the latest from Wells Fargo’s economics team about global economic growth and inflation impacts from the Russia-Ukraine war. Key excerpts and link to full rationale below.

UKRAINE CRISIS: A MODEST HIT TO GLOBAL ECONOMIC GROWTH

… We expect the direct trade exposure channel and the oil price channel could see the Russia/Ukraine crisis lower global GDP growth by around 0.25% for 2022. Should that transpire we would lower our 2022 global growth forecast from 4.0% to 3.75%.

A SLIGHTLY LARGER BOOST TO GLOBAL INFLATION

… When we add all this up, we believe the inflationary impact will outpace the growth effects. In that sense, our global CPI forecast could rise to 5.75% from 5.0% by the end of this year.

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– War could reduce global economic growth 0.25% & raise global inflation 0.75%: Wells Fargo Economics