The Implications of Russo-Ukrainian War on the Global Economy

Written by Shannon M De Souza

The Russo-Ukrainian War is wreaking havoc on the global economy was still in a process of stabilizing post the spread of Covid-19 around the world. The combat started when the Russian President, Vladimir Putin declared a military operation in Ukraine on February 24th, 2022, thus threatening Europe with a large-scale war once more after 1945. Russia’s invasion of Ukraine resulted in a lot of civilian casualties and collateral damage. The attack came after weeks of tensions that had already shaken the global economy by rising oil prices. The oil price ratcheted up by $100 per barrel for the first time after 2014 while European natural gas prices soared by 62%.


Source: https://www.nytimes.com/2022/02/24/world/europe/why-russia-attacked-ukraine.html

The government of the United States of America is placing sanctions on Russia as a protest against the war though they are aware this could have serious repercussions on their economy. The world economy has not been able to overcome the implications of Covid-19 that shook the financial markets and caused high inflation; this ongoing war will only worsen the situation. As a result, global energy prices will rise, as will food prices. Russia and Ukraine are two of the major grain exporters globally, so the global food supply will be disrupted. Disruption has also been experienced by the maritime sector in the shipping lanes of the Black Sea.

Pakistan’s economy is also being badly affected by the war. Food, consumer goods, and energy prices, among other things, are already rising. 39% of the wheat supply of Pakistan was distributed by Kyiv, Ukraine’s capital, last year. Other items including corn, barley, grain, and seeds are also imported from Ukraine, among other things. If a battle breaks out, supplies will be disrupted. All this would eventually result in inflation which would make life harder for the common man. The economy will deteriorate further. The job market will become much more strained. The rupee may probably reach 200 against the dollar, making imports prohibitively expensive.

When a war breaks out between countries it affects the whole world in one way or the other, especially economically and politically. The world is facing serious consequences due to the Russo-Ukrainian War. Russia would bear the brunt of the damage among large economies. President Vladimir Putin's expansionist foreign policies will almost certainly cost him a weakening domestic economy.

 

 

 

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