Latest update: 16 August 2022

There is a real risk of a return to the ‘stagflation’ that characterised the 1970s. The World Bank has lowered its global growth forecast from 4.1% to 2.9%, with a warning that many countries may see recessions.

Against this backdrop, GlobalData now forecasts the world economy will grow at just 3.1% in 2022, following 5.9% growth in 2021. At the same time, the global inflation rate is now projected to rise to 7.5% in 2022 from 3.5% in the previous year, up from 7% in the last report, which was published on 7 July 2022.


Consensus forecast for world GDP growth in 2021


Unemployment rate in OECD nations in August 2021


Latest update: 16 August 2022

Industry predictions

The apparel industry will be heavily impacted by the Russia-Ukraine conflict due to the exacerbation of existing inflation and supply chain issues from the pandemic, particularly within countries that are directly engaged in the crisis.

Rising commodity prices as a result of the Ukraine conflict will strain the apparel industry throughout Europe as the impact has wider consequences on the supply chain and the price of textiles. It is contributing to further inflationary pressure on consumers’ pockets, which will result in spending being diverted away from apparel purchases to more essential items across Europe.

Russia was the 10th largest apparel market in 2021, making US$47.8bn, while Ukraine was only worth $3.5bn in the same period. Global brands with strong trade in Russia must prepare for a sharp downturn in regional sales, and many have made the decision to cease trade in Russia and Ukraine amidst operational challenges, with some pledging to donate money and clothing.


Significant sanctions imposed on Russia will directly impact apparel trade, particularly for native brands that rely on the country’s economy, with many already struggling after the ruble’s devaluation. Consumers in Russia will be hit hard with a sudden rise in the cost of living, and most will divert spending away from apparel purchases.

The EU had previously excluded luxury goods from its sanctions, likely to protect its vital trade with wealthy Russians. However, most of the key luxury players including LVMH, Kering and Chanel have withdrawn sales from Russia, so the sanction exception was largely futile and has now been initiated. Chanel has now taken this one step further, by screening purchases from unfamiliar customers to ensure the products will not be taken across the Russian border.

Supply chain and demand disruption

The rising price of crude oil could have a significant impact on material prices, particularly for polyester and nylon which derive from petroleum. This will disproportionately affect value and mass market brands who are more reliant on these materials, however large-scale effects can be mitigated through the ongoing push to use organic and recycled textiles.

Neither Russia nor Ukraine are major manufacturing markets, however neighbouring countries such as Romania and Turkey are large exporters of apparel and could experience knock-on effects. Ukraine is a large exporter of certain textiles including down, and though this can still be sourced from other regions like China and the EU, this could cause production delays as those markets adjust to the increased demand.

Commodity price impact

Shockwaves will be felt across the world as oil and gas prices have risen significantly as a result of this conflict, with many governments planning to phase out Russian supplies. Consumers' discretionary spend has already been hit hard, with inflationary pressures filtering in from late 2021, particularly in Europe and North America.

Spend on apparel is squeezed as priorities are on more essential goods, and the uncertainty of these additional price implications could deter consumers even more from making unnecessary apparel purchases.