The global output is estimated to have slowed down during the first quarter of 2022, majorly owing to the ongoing conflict between Russia and Ukraine.
The geopolitical tensions have become intense amid the ensuing repercussions.
Significant divergent patterns have become persistent in the recovery of both advanced and emerging markets, as well as developing economies.
International Monetary Fund (IMF) in their “World Economic Outlook” for April 2022 notes global growth is estimated to decelerate to 3.6% in 2022 after registering a growth of 6.1% in 2021.
US economy observed a slowdown and registered a growth of 3.6% during the first quarter of 2022 after recording a growth of 5.5% in the final quarter of 2021.
The fall is mainly reflective of the fall in net exports; which observed a decrease while imports increased significantly.
Moreover, personal consumption expenditure observed growth mainly due to household spending on services; particularly healthcare spending, and a subsequent decline in consumer spending on goods.
The Euro region estimates record a growth of 5.1%, which unlike the US economy, registered an acceleration from 4.7% recorded in the preceding Q4-2022; despite facing economic blows over Covid-19 infections and restrictions in trade and public movement.
The region experienced growth despite facing increased certainty over the negative economic impact of the Russia-Ukraine conflict.
Expansion in economic activities were underpinned by the reopening of economies, while the recovery is supported by key factors such as compensatory fiscal performances.
Germany expanded its economic activity owing to higher capital formation while France slightly decelerated in its economic growth owing to a slowdown in household consumption expenditure.
Italy observed a slight deceleration in quarterly terms, though growth remained significantly high which was reflective of the strong domestic demand.
Unlike France and Italy, Spanish economy expanded during the quarter owing to gradual easing of containment measures.
Japanese economic which decelerated further to 0.4% during the final quarter of 2021, it showed subdued growth momentum; which is expected to be reported from the country for the first quarter of 2022.
United Kingdom accelerated in Q1-2022 while surpassing the pre-pandemic levels. Following a growth of 6.6% in Q4-2021, the economy accelerated observing a growth of 8.7% in the review quarter.
UK’s economy pushed forth mainly due to the output increment from information and communication sector, along with accommodation and food, as well as transportation and storage industries.
China’s economic growth observed an acceleration of 4.8% during the review quarter from 4.0% in the preceding quarter. Despite a better-than-expected performance, growth continued to be hampered by the large-scale movement restrictions owing to the Covid-19 Omicron variant. This put a dent on industrial production and retail sales during the quarter.
Growth momentum of India slowed down further during the review quarter after it decelerated to 5.4% in Q4-2021, due to the combined effects of repressed demand, supply-chain disruptions and the Russia-Ukraine conflict putting economic constrictions.
Russian economy is expected to have slowed down during the review quarter as well, which was due to the challenging external environment; with a hampered external trade.
Moreover, the consumer demand started to decrease in real terms following a rise in propensity to save by households due to the ensuing conflict with Ukraine.