The war in Ukraine is slowing the global economic recovery, which was just beginning to struggle from the effects of the Covid crisis.

Economic growth will fall from 6.1 percent in 2021 to 3.6 percent this year and next.

This emerges from the economic outlook that the International Monetary Fund (IMF) published for the spring meeting of the IMF and World Bank that started this week.

In January he had assumed 0.8 percentage points more for 2022.

Winand von Petersdorff-Campen

Economic correspondent in Washington.

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Manfred Schaefers

Business correspondent in Berlin.

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Germany, along with Italy, is one of the most affected countries in Western Europe.

The German economy will only grow by 2.1 percent this year and 2.7 percent in the coming year, predict the authors of the report.

The country is particularly dependent on Russian energy supplies.

As recently as January, the Monetary Fund had predicted growth of almost 4 percent for Germany this year.

The economy is growing more slowly than in most other industrialized countries.

The United States can still hope for a 3.7 percent gain this year.

Russia and Ukraine are important suppliers

The war has serious international repercussions because Russia and Ukraine are suppliers of important energy and food commodities.

The IMF expects oil prices to be contained as other countries have spare capacity and as strategic stocks are released.

Natural gas is more difficult to replace, which is why the raw material will remain expensive for a long time.

The economists are assuming further price increases for food raw materials, with Russia and Ukraine contributing 30 percent of global wheat exports.

Nevertheless, the IMF hopes that the global economy can avoid “stagflation” – i.e. high inflation when the economy is stagnating – like in the 1970s: the oil price shock is less than it was then, the dependency of the national economies is significantly less, and central banks are also more independent than they were then.

Nevertheless, at least Europe is not completely immune to a stagflation scenario due to its high energy dependency.

The war and sanctions halt large parts of trade with the countries involved.

This particularly affects countries like Bulgaria, Belarus or the Baltic states.

In addition, Russia and Ukraine play specialized roles in international supply chains.

For example, they contributed neon gas for the production of microchips, but had special tasks in car production.

Ukraine delivered an electronic system, the failure of which has already led to production stoppages in Germany, as reported by the IMF.

The fund recommends Europe in particular to counteract the shrinking demand with fiscal measures.

He sees the central banks, especially in the developed industrial nations, in a real dilemma: they have to weigh the risk of rising inflation against the weakening tendencies in the economy.