Executive Summary

Uncertainty continues to dominate global economy; central banks hold rates in the face of sticky inflation; manufacturing picks up, as services continue expansion; trade maintains momentum.

Will interest rate cuts be delayed and more cautious? High levels of uncertainty are casting a shadow over both economic sentiment and central bank policy. On the plus side, there is growing confidence among consumers, with an upward trend among the main economies continuing in March, according to the OECD global consumer confidence indicator—that said, sentiment remains below the long-term average level. Equally, consumer activity (measured by annual retail sales growth) is proving resilient with steady growth across economies, despite elevated prices and the current interest rate environment—although the eurozone is lagging somewhat. Over recent months, consumer prices have settled at high levels compared to the pre-pandemic period. Moreover, inflation is proving sticky in some economies and central banks are having to revisit their timetables for loosening monetary policy, which will disappoint hard-pressed businesses and consumers.

In the US—the world’s largest economy by nominal GDP—the consumer confidence index (Conference Board) registered 104.7 in March, essentially unchanged from a downwardly revised 104.8 in February. Meanwhile, retail and food-service sales climbed to $709.6 billion, a 0.7% increase from February’s $704.5 billion. But there are signs of growing financial strain among lower-income consumers in the US, with a rise in loan delinquencies among borrowers with incomes below $45,000, particularly in credit cards and auto loans—a trend that is prompting banks to tighten credit standards. Consumption continues to lag in the eurozone, where retail sales have not given any indication of a recovery in consumer spending. In Brazil, consumer confidence climbed 1.6 points to 91.3 in March, from 89.7 in February, but remains below the neutral 100-point mark.

Inflation is proving resistant in some advanced economies. In the US, the consumer price index was up 3.5% (annualized) in March, a slightly higher rise than the 3.2% for the 12 months ending in February. Core inflation rose 3.8% (annualized) in February. For a third consecutive month, median one-year-ahead inflation expectations remained unchanged at 3% (the lowest level recorded since January 2021), according to the March Survey of Consumer Expectations by the New York Fed. The UK Consumer Price Index fell by less than forecast to 3.2% in March 2024, albeit to its lowest rate since September 2021, mainly driven by a slowdown in food price inflation, but partially offset by rising fuel prices. Core inflation, which excludes items such as energy, food, alcohol, and tobacco, fell to 4.2%—down from 4.8% in February. Eurozone inflation was closer to target with March headline inflation falling to 2.4% and core inflation to 2.9%. Even so, services inflation remained at 4% for a fifth consecutive month.

Composite PMIs for individual economies are also generally more positive, buoyed by services and an improving manufacturing posture. Returning momentum in the eurozone was reflected in the composite PMI, which after 10 months has breached the 50-point threshold in April–March. The upturn was mostly driven by services, with the recovery in manufacturing yet to happen. Brazil saw business confidence increase from 94.1 in February to 94.7 in March, while the composite PMI remained unchanged at 55.1 in March, staying firmly within the expansion zone for a sixth consecutive month.

India is currently the standout performer in the services sector, which accounts for more than 50% of the country’s GDP, although all surveyed economies have been trending up over recent months. India’s services PMI reached 61.2 in March, buoyed by new businesses expansion and employment. Brazil’s services PMI rose slightly to 54.8 in March, from 54.6 in February. Favorable demand conditions and new business gains were cited as the main determinants of output growth. March data also pointed to a solid increase in business activity across the UK service economy, extending the current period of expansion to five months. The UK Services PMI registered 53.1 in March, down from 53.8 in February, but comfortably above the neutral 50.0 threshold.

Unemployment is mostly steady, though rates vary significantly among economies. At 3.8%, March’s unemployment rate in the US changed little from February’s 3.9%. That said, total nonfarm payroll employment rose by 303,000 net new jobs in March, the 39th straight month of growth. UK unemployment was estimated at 4.2% for the three months to February 2024; however, the economic inactivity rate for December 2023 to February 2024 rose to 22.2%, above estimates of a year ago (December 2022 to February 2023). Data from CMIE shows the all-India unemployment rate fell to 7.6% in March from 8% in February, with rural unemployment standing at 7.4% and urban at 8.2%. In China, the overall surveyed urban unemployment rate inched down to 5.2% in March (5.3% in February). Youth unemployment stabilized at 15.3% in March. Brazil’s three-month moving average unemployment rate rose slightly to 7.8% in February (7.6% in January), up for the second time in 12 months. Russia, again, is a special case: the unemployment rate is at an all-time low for the post-Soviet era (2.8% in February 2024). This trend is reinforced by a structural population decline driven by negative population growth and migration of roughly 900,000 people who have left the country due to the war in Ukraine and mobilization of reserves.

In general, equity markets have largely flatlined in April, after livelier growth in March. In March, US markets saw the S&P 500 climb by 3.10%, bringing its one-year return to 27.86%; the Dow Jones rose by 2.08% for the month and was up 19.63% in its one year’s growth. The latest performance by tech stocks, including cooling by market leader NVIDIA, could indicate lower returns for the S&P 500 in April. India’s stock markets continued to rise, with both the Nifty and Sensex adding 1.6% in value over the previous month, as of April 23 (compared to March 23, 2024). In Brazil, the Bovespa equities index rose in March, earning 1.5% in value.

Global supply chain pressures have normalized in recent months despite geopolitical uncertainty and climate events. World trade volumes expanded 0.9% in January, mainly driven by increased flows in emerging economies. February’s Container Throughput Index rose to 129.5 points, with throughput weakening slightly in China but recovering somewhat at European ports.

US exports in February were $263.0 billion, $5.8 billion more than January. February imports rose to $331.9 billion, $7.1 billion more than January’s imports. The total deficit increased by 1.9%, to $68.9 billion. China saw moderate growth of cross-border trade in the first quarter of this year. Both exports and imports reported a 1.5% year-on-year growth, up from −3.3% and 0.4% respectively in the final quarter of 2023. In March, India’s merchandise exports were the highest for any month of 2023–24, at US $41.7 billion, with non-POL (refined petroleum products) exports expanding. Merchandise imports declined to US $57.3 billion with year-on-year growth of 6%, due to negative momentum and an unfavorable base effect. The merchandise trade deficit was at an 11-month low of $15.6 billion in March 2024 due to a decline in imports. In March, Brazil registered a balance of trade surplus of US $7.5 billion, with exports totaling US $28.0 billion (US $23.5 billion in February) and imports reaching US $20.5 billion (US $18.2 billion in February).

Regional and Country Summary

In the advanced economies, US sees inflation rise, potentially postponing rate cuts; eurozone GDP paints a gradually improving picture; UK manufacturing PMI turns positive.

United States

March’s annual inflation rate rises to 3.5%; existing home sales drop by 4.6%—the largest monthly drop in a year; FOMC revision to monetary policy projection would lead to no interest rate cuts at April’s meeting.

Real GDP growth (annualized) in the US increased 1.6% quarter-over-quarter in the first quarter of this year, decelerating from a rise of 3.4% in the final quarter of 2023, according to the “advance” estimate released by the Bureau of Economic Analysis. Real GDP growth was 3% year-over-year.

At 3.8%, March’s unemployment rate changed little from February’s 3.9% (3.5% in January 2020), representing one of the weakest growths in employment in recent times. That said, total nonfarm payroll employment rose by 303,000 net new jobs in March, the 39th straight month of growth, with the number of job openings remaining high.

The consumer price index increased by 3.5% (annualized) in March, a slightly higher rise than the 3.2% for the 12 months ending in February. Core inflation rose by 3.8% (annualized) in February. For the third consecutive month, median one-year-ahead inflation expectations remained unchanged at 3% (the lowest level recorded since January 2021), according to the March Survey of Consumer Expectations by the New York Fed.

Retail and food-service sales climbed to $709.6 billion, a 0.7% increase from February’s $704.5 billion. The consumer confidence index (Conference Board) registered 104.7 in March, essentially unchanged from a downwardly revised 104.8 in February.

The industrial production index remained almost unchanged at 102.6 in March (December 102.7). The purchasing managers’ index (PMI) for manufacturing was revised lower to 51.9 from a preliminary 52.5 in March; the services PMI decreased to 51.7.

In March, the S&P 500 increased by 3.10%, bringing its one-year return to 27.86%; the Dow Jones rose by 2.08% for the month and was up 19.63% in its one year’s growth. During this month, the CBOE Volatility Index averaged 13.01 (13.1 in Feb). The latest performance by tech stocks, including cooling by market leader NVIDIA, could indicate lower returns for the S&P 500 in April.

Revision of FOMC projections indicates a slower decrease in the federal funds rate for 2025–26, signaling a possible delay in cuts for 2024. Recent remarks by Fed governors could lead to one more market meeting without interest rate cuts.

February exports were $263.0 billion, $5.8 billion more than January exports. February imports were $331.9 billion, $7.1 billion more than January imports. The total deficit increased by 1.9%, to $68.9 billion.

For the housing market, the 30-year fixed-rate mortgage rose to 7.1% on April 18; existing home sales fell –4.6% in March. During this month, housing starts decreased to 1,321,000 (1,549,000 in February), with March completions down to 1,469,000 (1,698,000 in February).

The US is experiencing a rise in loan delinquencies among borrowers with incomes below $45,000, particularly in credit cards and auto loans, according to bank executives and economists. This trend is prompting banks to tighten credit standards, reflecting growing financial strain among lower-income consumers.

The US Senate passed a $95 billion foreign aid package providing aid for Ukraine, Israel, and the Indo-Pacific region. A fourth bill in the package included sanctions on Iran and a measure that could lead to a TikTok ban.

The Eurozone

Emerging signs of gradual improvement in activity in Q1 2024; growth expected to strengthen in H2 2024; continuing disinflation; interest rate cuts on the horizon; proposal to strengthen EU’s single market and competitiveness.

Monthly surveys and data suggested that the eurozone’s economy has reached a turning point in the first quarter of 2024. Industrial production figures for February showed some recovery after a poor start to 2024, although retail sales did not provide any indication of a recovery in consumer spending.

Overall, GDP growth was positive but relatively meager: real GDP growth in the first quarter of 2024 reached 0.4% year-on-year. The divergence in performance among countries and sectors remains, with Germany and to a lesser extent France continuing to be the laggards. On the other hand, among the southern, services-intensive economies, Spain continues its outperformance.

GDP growth is forecasted to gradually strengthen further into the year backed by lower inflation and monetary policy easing. This would translate into stronger real incomes, and better consumer demand prospects. Improving momentum was reflected by the composite PMI, which after 10 months breached the 50-point threshold in April–March. The upturn was mostly driven by services, with the recovery in manufacturing yet to take place. Full-year forecasts assume GDP expansion by around 0.6% this year.

Disinflation in the eurozone is continuing. In March, headline inflation fell to 2.4% and core inflation also eased to 2.9% due to weaker non-energy industrial goods inflation. Services inflation stayed at 4% for a fifth consecutive month, reflecting its labor intensity combined with elevated wage growth. Also, an early Easter this year may have influenced figures in March. In coming months, inflation is expected to move closer to 2% and may undershoot the European Central Bank’s (ECB) inflation target in the second half of the year.

The ECB kept interest rates unchanged at its meeting in April but gave a clear signal that it’s ready to start cutting rates soon. The bank stated that, due to the success of monetary policy in driving a disinflation process towards target and in moderating underlying inflation, it would be appropriate to reduce policy tightness. The ECB pointed to a likely cut at its next policy meeting in June.

Two former Italian prime ministers Enrico Letta and Mario Draghi (a former ECB president) presented a proposal to strengthen the EU’s single market and competitiveness. This was in response to increasing concerns about the EU falling behind aggressive industrial policy in the US and China. Priorities include the need to complete the capital markets union and to enable scale through tackling fragmentation, more common action and greater focus on the delivery of public goods, and a fully integrated energy market to secure the EU’s economic security and an effective industrial policy.

United Kingdom

Inflation fell by less than expected to 3.2% in March; monthly GDP grew by 0.1% in February 2024; latest GDP projections by the BoE, OBR, OECD, and IMF indicate modest growth for 2023–25.

The IMF’s April World Economic Outlook projects modest growth of 0.1% in 2023, 0.5% in 2024, and 1.5% in 2025. The IMF’s forecasts have been revised down compared to its interim January update, highlighting that the UK will remain the second-worst performer among G7 nations. However, by 2025, the UK is tipped to be the third-best performer in the G7, as households recover following a prolonged cost-of-living crisis. The Office for Budget Responsibility’s March 2024 Economic and Fiscal Outlook projects GDP growth of 0.8% in 2024, jumping to 1.9% in 2025. Similarly, the OECD’s February Interim Report expects UK growth to pick up from 0.3% in 2023 to 0.7% in 2024 and 1.2% in 2025, with inflation dropping to 2.8% and core inflation to 3.6% in 2024.

UK real GDP is estimated to have grown by 0.2% in the three months to February 2024, compared with the three months to November 2023. Services output grew by 0.2% during this period, while production output grew by 0.7%; construction output fell –1%. However, monthly real GDP grew by 0.1% in February 2024, following 0.2% growth in January. Construction output grew 1.9% in February, services grew by 0.1%, and production grew by 1.1%.

The UK Consumer Price Index fell by less than forecast to 3.2% in March 2024, its lowest rate since September 2021, mainly driven by a slowdown in food price inflation, but partially offset by rising fuel prices. Core inflation, which excludes items such as energy, food, alcohol, and tobacco, fell to 4.2%—down from 4.8% in February. Meanwhile, the Bank of England Monetary Policy Committee voted to maintain the policy rate at 5.25% on March 21. Economists still expect UK interest rates to fall this year, with many anticipating the BoE will lower the cost of borrowing in the summer. The BoE expects the CPI to fall to slightly below the 2% target in the second quarter.

The seasonally adjusted S&P Global UK Manufacturing PMI index rose to a 20-month high of 50.3 in March, up from 47.5 in February and above the earlier flash estimate of 49.9. This was the first time the PMI has posted above the neutral 50.0 mark since July 2022. UK manufacturing showed tentative signs of recovery in March, as output and new orders increased, following year-long downturns. March data also pointed to a solid increase in business activity across the service economy, extending the current period of expansion to five months. That said, the latest survey indicated a loss of momentum since February, largely due to a weaker rise in new work. The UK Services PMI registered 53.1 in March, down from 53.8 in February, but comfortably above the neutral 50.0 threshold. UK construction companies showed a resurgence in activity during March, ending a six-month decline. Adding to signs of recovery in construction sector performance, new orders expanded at their fastest pace since May 2023. The UK construction PMI rose from 49.7 in February to 50.2 in March, signaling expansion at its highest level since August 2023.

Growth in average total pay was 5.6% in the three months to February 2024; real total pay rose by 1.6%. UK unemployment was estimated at 4.2% for the same period. The UK economic inactivity rate for December 2023 to February 2024 (22.2%) is above estimates of a year ago (December 2022 to February 2023) and increased in the latest quarter—the inactivity rate was 21.9% in October to December 2023. The estimated number of vacancies in January to March 2024 was 916,000, a –1.4% drop of 13,000 from October to December 2023. Vacancies have declined for a record 21st consecutive period, despite falling in only eight of the 18 industry sectors.

The opposition Labour party rebuffed an EU offer of a post-Brexit youth mobility deal to allow Britons aged 18–30 to live, study, or work in one EU country for up to four years. A day later (April 19), Prime Minister Rishi Sunak also rejected the proposal, which would have enabled young EU citizens to come to the UK on the same terms. The UK government had instead been looking to strike bilateral agreements.

In emerging economies, China grows strongly in Q1; India’s manufacturing PMI reaches 16-year high; inflation fell in Brazil for a sixth consecutive month; Russia federal budget faces large deficit.

China

China’s economy had a strong start in Q1. GDP growth edged up to 5.3%—above market estimates; investment activities accelerated, and new credit increased; cross-border trade reported moderate growth; the real estate slowdown continued.

In the first quarter of 2024, China’s GDP reported a stronger-than-expected growth rate of 5.3% year-on-year (5.2% in the fourth quarter of 2023)—74% of the growth was driven by consumption. By sectors, GDP growth in the industry sector accelerated to 6.0% year-on-year (5.5% in the fourth quarter of 2023), while GDP growth in the agriculture and services sectors respectively slowed to 3.3% and 5.0% year-on-year (4.2% and 5.3% in the fourth quarter of 2023).

Growth in investment activities gained pace. Overall fixed-asset investment showed a 4.5% year-on-year growth in the first quarter of this year (2.7% in the final quarter of 2023). Among sectors, manufacturing and infrastructure investments respectively expanded faster at 9.9% and 6.5% in the first quarter (7.2% and 5.2% respectively in the prior quarter). Contraction in real estate investment moderated slightly to −7.9% in the first quarter of 2024 (−9.1% in the fourth quarter of 2023).

The slowdown in the real estate market continued during the opening quarter of the year. On the demand side, floor space sold in new residential properties declined −27.8% (−23.7% in the final quarter of 2023) and average new home prices dropped −1.9% (−0.7% in the fourth quarter of 2023). On the supply side, floor space started fell −28.7% across the first quarter of 2024 (−10.1% in the preceding quarter).

New credit increased to RMB 12.9 trillion in the first quarter of 2024 (RMB 6.2 trillion in the last quarter of 2023). This represented a fall of −11% compared to the same period a year ago, with over 90% of the contraction coming from shrinking new bank loans. Total social financing amounted to RMB 390.3 trillion in March, a growth of 8.7% year-on-year, down from 9.0% in February.

The overall surveyed urban unemployment rate inched down to 5.2% in March (5.3% in February). The youth unemployment rate stabilized at 15.3% in March.

Growth of cross-border trade was moderate in the first quarter of this year. Both exports and imports reported a 1.5% year-on-year growth, up from −3.3% and 0.4% respectively in the final quarter of 2023.

Foreign direct investment (FDI) inflows into China declined by −26% year-on-year in the first quarter of 2024 (compared to −8% for whole of 2023), according to data released by the Ministry of Commerce.

India

India is potentially witnessing a sustained increase in GDP growth, fueled by strong investment and positive business and consumer sentiment; inflation steadied at 4.9% in March; near-term risks include potential inflationary pressures from extreme weather and geopolitical tensions affecting oil price stability.

Based on SIAM’s March 2024 data, automobile sales have declined further (–0.7%) compared to the prior month, to stand at 368,086 (370,786 in February).

December’s Index of Industrial Production (IIP) registered year-on-year expansion with growth of 5.7% above the February 2023 figure, complemented by all sectors posting growth versus 2023 in the range 5–8%. On a monthly basis, month-on-month growth declined across sectors: mining (–3.1%), manufacturing (–3.7%), and electricity (–5.1%).

The purchasing managers’ index (PMI) for manufacturing reached a 16-year high at 59.1 in March 2024 from 56.9 in February, backed by new orders and increasing output levels. The services PMI reached 61.2 in March, as a result of new businesses expansion and employment. The services sector accounts for more than 50% of India’s GDP.

Headline inflation moderated to 4.9% in March from 5.1% the previous month. In March, food inflation moved downwards to 7.68% from 7.8% the previous month, while deflation in the fuel and light group deepened from –0.8 in February to –3.24 in March.

In March, India’s merchandise exports were the highest for any month of 2023–24, at US $41.7 billion, with non-POL (refined petroleum products) exports expanding. Merchandise imports declined to US $57.3 billion with year-on-year growth of 6% due to negative momentum and an unfavorable base effect. The merchandise trade deficit was at an 11-month low of $15.6 billion in March 2024 due to a decline in imports.

India’s foreign exchange reserves reached an all-time high of US$ 648.6 billion on April 5, 2024, the equivalent of covering 99 per cent of total external debt outstanding at the end of December 2023.

The Indian rupee appreciated against both the euro and US dollar, to stand at 89 rupees per euro and 83 per dollar (as of April 24).

The stock markets remained in the expansionary zone, with both the Nifty and Sensex adding a growth of 1.6% in value over the previous month, as of April 23 compared to March 23, 2024.

Inward foreign direct investment’s decline moderated to 2.8% to reach US $65 billion from April 2023 to February 2024 versus US $66.8 billion in the corresponding period in the prior year—despite this drop India continues to be one of the more lucrative destinations for inflows. Foreign portfolio investment (FPI) flows into India continued a positive trend in March 2024, driven by a strong domestic growth outlook. In March 2024, net FPI inflows amounted to US $6.7 billion, with the debt segment contributing US $2.7 billion and US $4 billion from the equity segment.

The Reserve Bank of India’s stance on the repo rate remains unchanged at 6.5%, with the reverse repo rate at 3.35%.

Data from CMIE shows the all-India unemployment rate fell to 7.6% in March from 8% in February, with rural unemployment standing at 7.4% and urban at 8.2%.

Brazil

Inflation falls for a sixth consecutive month, while the composite PMI remains unchanged at 55.1.

Inflation fell to 3.93% in March (4.50% in February), registering a sixth consecutive month of reduction. Transport prices were the main downward influence last month due to a drop in airfare prices and a slowdown in gasoline price increases (rising 0.2% compared to 2.9% in February).

Consumer confidence climbed 1.6 points to 91.3 in March, from 89.7 in February, while remaining below the neutral 100-point mark. Consumer confidence has reached its highest level so far this year and is 4.0 points higher than in March 2023. Business confidence increased from 94.1 in February to 94.7 in March.

Brazil’s purchasing managers’ index (PMI) for manufacturing dropped to 53.6 in March from 54.1 in February, remaining above the neutral 50 mark for a third consecutive month. New orders rose for the third successive month in March, and at the strongest rate in over two-and-a-half years. Although domestic demand improved further, manufacturers continued to report challenges securing international orders. Asia, Europe, and Latin America were particularly cited as sources of weakness. External sales were down for the 25th consecutive month; however, the pace of decrease has slowed since February.

The services PMI rose slightly to 54.8 in March, from 54.6 in February. Favorable demand conditions and new business gains were cited as the main determinants of output growth. Indeed, firms observed a marked increase in sales that was the second fastest since October 2022, behind that seen in February. The composite PMI remained unchanged at 55.1 in March, staying firmly within the expansion zone for a sixth consecutive month.

On the financial markets, the monthly average exchange rate was BRL 4.98 per US dollar in March (4.96 in February). The March Bovespa equities index rose, earning 1.5% in value. Meanwhile, the three-month moving average unemployment rate slightly increased to 7.8% in February (7.6% in January), up for the second time in 12 months.

In March, the balance of trade registered a surplus of US $7.5 billion, with exports totaling US $28.0 billion (US $23.5 billion in February) and imports reaching US $20.5 billion (US $18.2 billion in February).

After declining for two months, Brazil’s chicken exports to international markets increased 5.2% in March. Additionally, Brazil gained access to export both farmed and wild-caught seafood to India. Brazil’s seafood exports during the first three months of the year were 160% higher compared to the same period last year.

Russia

Economic growth slows in February, while accelerating inflation reflects capacity constraints; labor market remains tight and wages growth is predicted to slow; oil production expected to decline slightly; current account sees recovery; federal budget faces large deficit.

Monthly indicators for February suggest growth in overall economic activity has slowed. Government released data indicates manufacturing output saw improvement, while retail sales improved slightly in April. Private consumption is expected to continue to be the main growth in the coming months, although this is predicted to be slower than in past months.

Inflation has continued to accelerate over recent months with consumer prices rising by 7.7% year-on-year in March. This reflects tightening of capacity constraints, underlined by capacity utilization being at its highest levels historically. However, the increase in average nominal wages is unlikely to continue in 2024. Government-released data suggests the unemployment rate is at an all-time low for the post-Soviet era (2.8% in February 2024).

According to The Bank of Finland Institute for Emerging Economies (BOFIT), Russian oil exports will remain at the level of early 2024 throughout the forecast period. The price of Brent crude is expected to stick near the 2023 average level of about $83 a barrel (Based on the ICE brent oil futures prices).

Preliminary Central Bank of Russia figures indicate that Russia’s current account surplus continued to recover in March from a December dip—the current account surplus was around 13.4 billion dollars in that month. Although still smaller than at its peak in 2022, the surplus is just slightly lower than in an average month during 2021–22.

Government released data states that Federal budget spending increased by 17% year-on-year in January–February. Driven by higher oil and gas earnings, federal budget revenues grew in February from a low base compared to a year earlier. Despite this growth in revenues, the federal budget remained in deficit to the tune of 1.5 trillion rubles (0.8% of GDP). Under the budget framework, the total deficit for this year should be roughly 1.6 trillion rubles.

McKinsey’s Global Economics Intelligence (GEI) provides macroeconomic data and analysis of the world economy. Each monthly release includes an executive summary on global critical trends and risks, as well as focused insights on the latest national and regional developments. Detailed visualized data for the global economy, with focused reports on selected individual economies, are also provided as PDF downloads on McKinsey.com. The reports available free to email subscribers and through the McKinsey Insights App. To add a name to our subscriber list, click here. GEI is a joint project of McKinsey’s Strategy and Corporate Finance Practice and the McKinsey Global Institute.

The data and analysis in McKinsey’s Global Economics Intelligence are developed by Jeffrey Condon, a senior expert in McKinsey’s Atlanta office; Krzysztof Kwiatkowski is an expert in the Greater Boston office; and Sven Smit, a senior partner in the Amsterdam office.

The authors wish to thank Nick de Cent, as well as José Álvares, Cristina Barrantes, Marta Dabrowska, Juhi Daga, Darien Ghersinich, Ricardo Huapaya, Yifei Liu, Marianthi Marouli, Tomasz Mataczynski, Frances Matamoros, Jose Maria Quiros, Erik Rong, and Sebastian Vargas for their contributions to this article.

The invasion of Ukraine continues to have deep human, as well as social and economic, impact across countries and sectors. The implications of the invasion are rapidly evolving and are inherently uncertain. As a result, this document, and the data and analysis it sets out, should be treated as a best-efforts perspective at a specific point of time, which seeks to help inform discussion and decisions taken by leaders of relevant organizations. The document does not set out economic or geopolitical forecasts and should not be treated as doing so. It also does not provide legal analysis, including but not limited to legal advice on sanctions or export control issues.