Study: Ukraine War Expected to Have Bigger Impact on European Economies

 Ukrainian servicemen prepare to fire a M109 self-propelled howitzer towards Russian troops, amid Russia's attack on Ukraine, in Donetsk region, Ukraine September 22, 2023. (Reuters)
Ukrainian servicemen prepare to fire a M109 self-propelled howitzer towards Russian troops, amid Russia's attack on Ukraine, in Donetsk region, Ukraine September 22, 2023. (Reuters)
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Study: Ukraine War Expected to Have Bigger Impact on European Economies

 Ukrainian servicemen prepare to fire a M109 self-propelled howitzer towards Russian troops, amid Russia's attack on Ukraine, in Donetsk region, Ukraine September 22, 2023. (Reuters)
Ukrainian servicemen prepare to fire a M109 self-propelled howitzer towards Russian troops, amid Russia's attack on Ukraine, in Donetsk region, Ukraine September 22, 2023. (Reuters)

The war in Ukraine has reduced European economic growth and "considerably" pushed up inflation across the continent, 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 in the economies of both Russia and Ukraine, the report said.

Examining the war's economic impact on Germany, Britain, France, Italy and Switzerland, the study said output would have been between 0.1% and 0.7% higher in the fourth quarter of 2022 if Russia had not invaded Ukraine.

Consumer prices in each of the countries would have been between 0.2% and 0.4% lower, said the working paper, which aims to stimulate discussion and is not necessarily the viewpoint of the SNB.

"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, 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 also 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.

However, the authors said their estimates tended towards the low side because they "probably" underestimated food price inflation and looked at oil prices rather than gas prices.

The impact of refugees and increased military spending may be more than in recent conflicts, they added.



Taiwan Holds First Tariff Talks with United States

A plane takes off above the skyline including Taipei 101 (C) in Taipei on April 11, 2025. (AFP)
A plane takes off above the skyline including Taipei 101 (C) in Taipei on April 11, 2025. (AFP)
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Taiwan Holds First Tariff Talks with United States

A plane takes off above the skyline including Taipei 101 (C) in Taipei on April 11, 2025. (AFP)
A plane takes off above the skyline including Taipei 101 (C) in Taipei on April 11, 2025. (AFP)

Taiwan officials held their first tariff talks with US officials on Friday, with both sides looking forward to further discussions soon, the island's government said on Saturday.

While Taiwan, a major semiconductor producer facing tariffs of 32%, complained they were unfair, it moved quickly to lay out proposals with the United States, offering a zero-tariff regime and greater purchases and investments in the country.

In a statement, Taiwan's Office of Trade Negotiations said its officials held a video conference with US officials whom it did not identify.

The talks focused on reciprocal tariffs between Taiwan and the United States, non-tariff barriers to trade, and a number of other economic and trade issues, including export controls, it added.

"Both sides look forward to conducting follow-up consultations ... in the near future and jointly building a strong and stable economic and trade relationship between Taiwan and the United States," it said.

The Office of the United States Trade Representative did not immediately respond to a request for comment sent outside of Washington work hours.

On Wednesday, US President Donald Trump said he would temporarily lower the hefty duties he had just imposed on dozens of countries, while further ramping up pressure on China.

Home to the world's largest contract chipmaker, TSMC, Taiwan has long sought a free trade deal with the United States, its most important international backer and arms supplier, even though the two have no formal diplomatic ties.

Taiwan faces increasing military and political pressure from its giant neighbor China, which views the democratically governed island as its own territory.

Taiwan's government rejects those claims, saying only the island's people can decide their future.