The Institute for Economics and Peace estimates that violence and conflict expansion cost the global economy $19 trillion in 2023, equivalent to 13.5% of global GDP, a total increase of $157 billion over the previous year 2022, while total spending on peacebuilding and peacekeeping efforts amounted to $49.6 billion.

In its report, the Australian Institute monitored 56 conflicts around the world, the largest number since the end of World War II, and the deterioration of peaceful conditions in 97 countries, the largest number monitored by the Institute since it launched the Global Peace Index in 2008.

The Institute for Economics and Peace (IEP) is an international research institution, covering 163 independent countries and territories, home to 99.7% of the world's population.

The ranking, which is based on 23 indicators, grouped into three criteria (societal safety and security; extent of ongoing domestic and international conflict; and degree of militarization), shows that 65 countries recorded an improvement in the peace index, while 97 countries showed a deterioration.

The global economic impact of violence is defined as the money spent and the economic impact of containing, preventing and dealing with the consequences of violence.

Overall, the GPI fell by 0.56% in 2023. This is the twelfth time the average has fallen, for a total decrease of 4.5% since the index was launched. At the same time, the number of refugees and internally displaced people rose to 95 million, with 16 countries having at least 5% of the population either refugees or internally displaced people.

The Global Peace Index found that the overall impact of violence was 7.4% higher in 2023 than in 2008. Significant improvements were recorded between 2010 and 2012, after which the impact steadily increased. Since 2008, 89 countries have recorded a deterioration in the impact of violence on their economies, while 74 countries have seen an improvement.

Most affected regions

The report notes that there are significant regional differences in the economic impact of violence, with South Asia seeing the largest deterioration, while Russia and Eurasia saw the largest improvement. The deterioration in South Asia can be attributed to higher GDP losses and costs associated with conflict deaths in Pakistan.

Central America and the Caribbean was the second region to see an improvement in the economic impact of violence, driven by a significant $1 billion reduction in the economic impact of homicides in El Salvador.

The data confirms the link between peaceful societies, economic growth, stronger currencies and increased foreign investment. Iceland, Ireland, Austria, New Zealand and Singapore were the five most peaceful countries in 2023.

Yemen was the least peaceful country in 2023, followed by Sudan, South Sudan, Afghanistan and Ukraine. The index also found “growing inequality in peace,” with the gap between the most and least peaceful countries wider than ever.

Last year, Ukraine recorded the biggest deterioration in the index, falling 14 places to 157th globally.

The report said the conflict in Gaza also had a negative impact on world peace, with Israel and Palestine recording the first and fourth largest deteriorations in rankings, respectively. Ecuador, Gabon and Haiti were among the other countries that saw sharp declines.

According to the survey, “the largest increases in the economic impact of violence occurred in Palestine and Israel, where the total impact increased by 63% and 40%, respectively.” Ukraine, Afghanistan, and North Korea faced the highest economic costs of violence relative to their GDP in 2023, at 68.6%, 53.2%, and 41.6%, respectively.

Second highest death toll in 3 decades

Overall, last year saw 162,000 deaths due to conflicts and wars, the second highest toll in three decades.

The wars in Ukraine and Gaza were responsible for nearly 75% of these deaths, with Ukraine alone responsible for more than half (83,000 deaths) and Gaza seeing at least 33,000 casualties by April 2024.

Countries around the world will spend $8.4 trillion on military equipment in 2023. Globally, the economic impact of military spending will increase by 1.4% in 2023, to $116.3 billion. There has been a significant increase in military spending over the past few years, with several European countries committing to spending more in the coming years, largely due to the ongoing conflict in Ukraine. According to the survey, spending on internal security accounted for 30% of the global economic impact of conflicts and wars, at around $5.4 trillion. This includes spending on police, the justice system and prison costs. Spending on private security fell by 0.2% to $1.3 trillion. 56 Active Conflicts in the World Researchers at the Institute for Economics and Peace point out that many of the factors that precede major conflicts are usually more pronounced than they have been since the end of World War II. There are currently 56 active conflicts, the highest number since the late 1940s, with fewer conflicts settled, either militarily or through peace agreements. Regionally, North America recorded the largest average deterioration of all regions, with a decline of almost 5%, driven primarily by increases in violent crime and fear of violence in both Canada and the United States. The Middle East and North Africa, home to four of the world’s 10 least peaceful countries, is the least peaceful region in the world. Sub-Saharan Africa, the second least peaceful region, also recorded a decline in peacefulness this year. Elsewhere, Central America and the Caribbean’s average score fell slightly by 0.17%, with seven of 12 countries declining and five improving. Notably, El Salvador and Nicaragua, respectively, recorded the largest improvements globally. South America also declined (by 3.6%), driven by deteriorations in the areas of safety and security and ongoing conflict. Western Europe remains the world’s most peaceful region overall, with seven countries in the top 10, including the top three. Europe’s strength stems from relatively low internal conflict and political instability and high social and economic development, supported by long-standing efforts to develop peaceful societies at home. However, the continent last year recorded the largest annual increase in military spending since the index was created. After Western Europe, the Asia-Pacific region is the second most peaceful, with an overall score deteriorating by 0.1%.