The global economy is set for a step back by the end of the year, and recession risks are elevated against the backdrop of Russia’s invasion of Ukraine and Covid-19 shutdowns in China, according to the Peterson Institute for International Economics.

A combination of factors -- including oil prices skyrocketing following the war in Europe, a consumer pullback amid the highest prices in four decades and slowing China growth -- increase the chances of a contraction, the Washington-based think tank said in a report set for publication Tuesday.

The group is the latest to flag concerns of a recession, with economists surveyed by Bloomberg reporting rising dangers of a downturn. The White House’s top economic adviser Brian Deese said Monday the U.S. faces a lot of uncertainty, while refraining from laying odds on a recession.

Global growth will slow to 3.3% this year and next, compared with 5.8% in 2021, the Peterson Institute said, adding that the U.S. is forecast to grow 3% this year and 2% in 2023. PIIE’s estimate is in line with most major forecasts, with economists seeing annualized U.S. growth averaging 3.3% this year followed by a step down to 2.2%, according to a Bloomberg survey in April.

“After a year of recovery from pandemic-related weakness, nearly all countries are seeing a significant slowing of economic growth,” Karen Dynan, PIIE senior fellow and former U.S. Treasury Department chief economist, said in the report.

Following a rebound as countries reopened after pandemic lockdowns, and government stimulus in the U.S., economies are hitting headwinds: Consumers are struggling to accept elevated prices and supply chain issues have cut goods delivery.

Russia’s invasion of Ukraine further exacerbated these problems, while China has locked down several major regions as the government contends with outbreaks of the coronavirus, moves set to slow economic growth there.

Core U.S. inflation will ease to 4.1% this year and ease further to 3% in 2023, according to PIIE -- still above the Federal Reserve’s 2% target. Consumer prices excluding energy and food skyrocketed 6.6% in March from a year earlier, according to economist forecasts for data due for release Tuesday morning.

Fed policymakers tightened interest rates by a quarter point and penciled in seven more increases this year. While that should help cool prices, the Fed risks over-correcting, PIIE said. Tighter policy would curb demand for workers, with shortages easing and pushing up the unemployment rate to 4.5%, above the pre-pandemic period, according to the group.

This article was provided by Bloomberg News.