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One year of war in Ukraine: Assessing the impact on global trade and development
The war in Ukraine is causing immense human suffering. At the same time, it has delivered another severe challenge to the global economy. This publication examines the implications of the war for global trade and development. It looks in particular at the impact of the war on exports from Ukraine and Russia and explores how countries highly dependent on imports from the conflict region have responded.
The publication shows that the multilateral trading system has remained resilient, with trade growth substantially higher than the more pessimistic predictions for 2022. Prices rose for goods most affected by the war but by less than expected at the beginning of the conflict. The positive trade performance of countries dependent on imports from Ukraine and Russia was facilitated by their ability to switch their import supply to unaffected economies.
In the longer term, new simulations highlight the importance of strengthening the multilateral trading system. The latest simulations run by WTO economists modelling the long-run scenario of a decoupling of the global economy into two rival blocs show that the opportunity cost of moving to geopolitical rivalry is estimated at 8.7 per cent of real income at the global level, with the most vulnerable economies facing opportunity costs as high as 11.3 per cent.
Published in 2023.
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