The Ukraine war added 3 trillion US dollars cost over the world economy in just one year

The Organization for Economic Co-operation and Development estimates that a Russian invasion of Ukraine would cost the global economy $2.8 trillion, most of it in Europe.

The Russian invasion has so far caused energy price hikes that have dampened household spending and undermined business confidence over the past year, especially in the European bloc.

The conflict also disrupted global supply chains and caused food shortages, as both Russia and Ukraine are major producers of wheat and grain.

Also, the war shook the financial markets around the world.

Europe is among the regions of the world most affected by the Russian war in Ukraine, as it led to disruption of energy supplies and forced countries to pay billions of US dollars to support families and companies, which led to a rise in government debts and vibration of the Euro and British sterling currencies.

This led to an increase in borrowing costs, which may further weaken economic growth in both Britain and the countries of the European continent.

The OECD report said that its 35 member governments committed to spending nearly $150 billion on large-scale measures to keep energy and food prices low until December last year, and about $15 billion on subsidizing other commodity prices.

In the energy market, Fatih Birol, head of the International Energy Agency, warned that Europe hasn’t yet won the energy war with Russia, despite the significant decline in natural gas prices.

“Although the European Union has largely avoided a full-blown energy crisis after Russia weaponised gas supplies, which raised fears at the time of widespread shortages and power outages, next winter could present an even greater challenge if the continent experienced much colder weather”.

He added, “It would be very difficult to say that Europe has already won the energy battle, and I think Europe has done a good job, and its strategy has achieved great success, but being overconfident about the coming winter is very risky, and it is time to continue and intensify efforts for 2023”.

Birol pointed to some achievements in the field of clean energy and reducing Russia’s revenues, but it’s not a permanent solution, saying: We got some help from the fair weather, and we gained some time, which is vital, but there is still a lot to do.

Gas prices in Europe have fallen by up to 85% since reaching a peak of more than 300 Euros per megawatt hour in August.