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.
