Implications of the Russian Invasion of Ukraine for the European Economy

The cost of the war, so far, can be estimated at around one-and-a-half point of lower real growth and about three additional points of headline inflation. The invasion came at a time when the European economy was still recovering from the impact of the Covid-19 pandemic. The revisions of major official forecasts for this year, all point to the same direction: accelerating inflation and decelerating growth.

The briefing note prepared by the Chief Economist Team, European Commission, and Directorate General for Internal Market, Industry, Entrepreneurship and SMEs provides an overview of economic and trade exposures of the EU economy to Russia, including on strategic dependencies at the product level and a novel monitoring approach to detect supply chain distress. It also covers recent trends in energy prices.

For the briefing note, please see here