Institute for Economics
Overview: The economic impact of violence to the global economy was $14.76 trillion in 2017, in constant purchasing power parity (PPP) terms. This figure is equivalent to 12.4 per cent of global gross domestic product (GDP) or $1,988 per person. Given there are categories of violence that impose costs but where no reliable prevalence data is available, the estimates presented in this report are considered to be conservative.The global economic impact of violence rose by two per cent during 2017, due to increases in cost of conflict and internal security spending. The rise in the economic impact of violence coincides with a 0.27 per cent deterioration in peace, as measured by Global Peace Index (GPI) 2018.
Since 2012, the economic impact of violence has increased by 16 per cent, corresponding with the start of the Syrian war and the rise of Islamic State. The intensification of conflicts in Afghanistan and Iraq have also added to the economic impact.
Violence has adverse implications for the broader economy, both in the short and long term, and imposes substantial economic costs on society. The economic impact of violence in the ten most affected countries was equivalent to 45 per cent of their GDP. This is approximately 19 times higher than the ten countries least affected by violence in which the average economic cost of violence is just over two per cent of GDP. This is also significantly smaller than the global average economic cost of violence, which amounts to 11 per cent of GDP.
