ZURICH, Sept 22 (Reuters) – The war in Ukraine has reduced economic growth and “considerably” pushed up inflation across Europe, the Swiss National Bank said in a study published on Friday, with worse effects still to come.
Since Russia invaded Ukraine in February 2022, Europe has seen a surge in energy prices, financial market turmoil and a sharp contraction of Russia’s and Ukraine’s economies, the report said.
Examining the impact of the war on Germany, Britain, France, Italy and Switzerland’s economies, the study said output would have been between 0.1% and 0.7% higher in the fourth quarter of 2022 if Moscow had not attacked Kyiv.
Inflation in each of the countries would have been between 0.2% and 0.4% lower, it said.
“The negative consequences of the war are likely to be far greater in the medium-to-long term, especially with regard to the real economy,” the study said.
“In one to two years, this effect is likely to be approximately twice as large,” it added.
Germany was the worst affected country, the study said. Its GDP would have been 0.7% higher and inflation would have been 0.4% lower in the fourth quarter of 2022 if Russia had neither attacked nor threatened Ukraine, the study said.
Britain was particularly hard hit, with economic output reduced by 0.7%, and inflation increased by 0.2%.
France would have seen inflation 0.3% lower and GDP 0.1% higher without the conflict, while Italian inflation would have been 0.2% lower and GDP 0.3% higher.
Swiss GDP would have been 0.3% higher and inflation 0.4% lower without the war, the study added.
Because the conflict is closer to Europe than previous wars, countries in Europe have also been more adversely affected by refugees and additional military spending than in the past.