KONRAD RACZKOWSKI: ECONOMICS OF WAR

In an interview with Rzeczpospolita, the director of the Center for the World Economy, Prof. Konrad Raczkowski, PhD, touched on the consequences that will result from the ongoing war in Ukraine.

According to the professor, a quick end to the armed conflict in Ukraine is unlikely, the main consequences of which will be high inflation, geopolitical tensions, and a food crisis in places such as Africa, the Middle East and parts of Asia.

The article provides an in-depth analysis, and the following are the most important statements.

– Markets are not forecasting a wider war in Europe that would involve countries other than Ukraine, but financial and economic crises in individual countries, yes.

– Certainly the war will reduce economic growth, especially in Russia. In the EU, the United States and Poland, expect larger growth losses in 2023 and 2024 than in 2022. The degree of economic slowdown will be directly correlated with the length of the hostilities and crop losses.

– Reports from the Ukrainian side indicate that much of Ukraine’s agricultural machinery and crops are being deliberately destroyed by Russian troops, which will prevent harvests and could cause a food crisis in countries such as Egypt, Indonesia, Bangladesh, Pakistan and even Turkey.

– Inflation as measured by statisticians will be disconnected in part from the much higher inflation as perceived by consumers, which will continue to rise month after month, depending on the scale of the enforced Russia-Ukraine war, economic shock and enforced laws limiting wallet wealth and living standards.

The entire article can be read at:

https://www.rp.pl/opinie-ekonomiczne/art36019531-konrad-raczkowski-ekonomia-wojny