Global economic impact of violence
The economic impact of violence on the global economy in 2018 amounted to $14.1 trillion in constant purchasing power parity (PPP) terms. This is equivalent to 11.2 per cent of the world’s GDP or $1,853 per person.
In 2018, the economic impact of violence improved for the first time since 2012, decreasing by 3.3 per cent or $475 billion. The decline in the economic impact of violence is reflective of the improvement in global peacefulness.
The reduction was primarily due to a decline in the costs associated with Armed Conflict. This improvement was mainly due to lower levels of armed conflict in Syria, Colombia and Ukraine. This also resulted in a positive knock-on effect for refugees and internally displaced persons and terrorism, with reductions in the costs for both.
The economic impact of terrorism recorded the largest percentage improvement in 2018, decreasing by 48 per cent from 2017.
Syria, Afghanistan and the Central African Republic incurred the largest economic cost of violence in 2018 as a percentage of their GDP, equivalent to 67, 47 and 42 per cent of GDP, respectively.
In the ten countries most affected by violence the average economic cost was equivalent to 35 per cent of GDP, compared to 3.3 per cent in the ten least affected.
The global economic impact of violence is defined as the expenditure and economic effects related to “containing, preventing and dealing with the consequences of violence.” The estimate includes the direct and indirect costs of violence, as well as an economic multiplier. The multiplier effect calculates the additional economic activity that would have accrued if the direct costs of violence had been avoided.
For the complete analysis, download the Global Peace Index.