UK Could be Worst Hit by Economic Fallout From Ukraine Conflict

The Organisation for Economic Co-operation and Development (OECD) predicts the UK will do better economically than its erstwhile European Union neighbours this year, but that British growth will fall to zero in 2023.

Top Western economic analysts have predicted a major slump in economic growth as a result of the conflict in Ukraine.

The latest Economic Outlook forecast by the Organisation for Economic Co-operation and Development (OECD) warned that "the war is slowing the recovery" from the COVID-19 pandemic among the group's 38 member countries.

The Paris-based organisation downgraded its annual growth projections from December 2021 by up to 3.2 percent for some nations' economies.

Among the G7 group of the largest Western economies — excluding Eurasian giants China, Russia and India — Japan is set to be hit the hardest, with projected growth falling from 3.41 percent to 1.7 percent. Germany is not far behind on 1.87 percent, followed by France with 2.36 percent and and the US with 2.46 percent.

The UK will fare better than its former fellow members of the European Union (EU) in 2022, with growth holding up at 3.64 percent. But that will fall off to zero in 2023, according to the forecast, compared to 1.2 percent for the US and and average of 1.6 percent for the 17 Eurozone states.

The British government has led the charge in sanctions on Moscow over its special military operation in the Ukraine, boasting that it is less reliant on Russian natural gas and oil imports than EU members such as France and Germany.

Portugal, one of the poorest member states of the EU, has the consolation of doing best in the OECD outlook, maintaining 5.4 percent growth.

Economic War

The OECD identified soaring commodity prices since the start of the conflict in February as the main brake on economic recovery.

But they blamed that not on the Western sanctions on top energy and food producer Russia that prompted the record inflation, but on Moscow's military operation to defend the Donetsk and Lugansk People's Republics — or 'green' policies that have only made western Europe more dependent on Russian gas.

The OECD also attacked China, claiming that what it called a "zero-COVID" lockdown response to the pandemic "may continue to disrupt supply chains" — an admission of the West's reliance on Asian imports.

"Countries worldwide are being hit by higher commodity prices, which add to inflationary pressures and curb real incomes and spending, dampening the recovery," said OECD Secretary-General Mathias Cormann. "This slowdown is directly attributable to Russia’s unprovoked and unjustifiable war of aggression, which is causing lower real incomes, lower growth and fewer job opportunities worldwide."

The group's chief economist Laurence Boone repeated Kiev's claims that the conflict was threatening worldwide hunger by preventing exports of Ukrainian grain crops from the southern port of Odessa.

"The Outlook is sobering, and the world is already paying the price for Russia’s aggression," Boone said. "The choices made by policymakers and citizens will be crucial to determining how high that price will be and how the burden will be shared. Famine is not a price the world should pay."

Russia has pledged not to impede merchant shipping to Odessa, but said it is the Ukraine's responsibility to clear naval mines it sowed around the Black Sea port.