The Crisis in Ukraine

This note examines the implications of the crisis in Ukraine for global trade and development. It highlights the importance of the supplies of food, energy and certain industrial inputs from Russia and Ukraine, and explores how the war is causing severe risks to food and energy security as well as exacerbating supply chain difficulties. Simulations from the WTO Global Trade Model indicate that global GDP and trade growth could be reduced by up to 1.3 and 2.2 percentage points, respectively, with effects concentrated in Europe and Africa. This note further shows that if the war were to cause a disintegration of the global economy into separate blocs, the income losses would be severe, especially for emerging and developing economies. This highlights the importance of the rules-based multilateral trading system, not least because the WTO provides functions that can help to cushion the impact of the crisis.