প্রকাশ: 23/03/2022
In a month of
conflict in Ukraine, global oil prices have soared, foreign companies have
exited Russia and Moscow faces the spectre of default.
Here is a look at the economic fallout from Russia's
February 24 invasion of its neighbour:
Commodities soar
Oil and gas prices have surged over supply fears as Russia
is one of the world's biggest producers and exporters of the fossil fuels.
Brent North Sea crude, the international benchmark, stood at
around $90 in February. On March 7, it jumped to $139.13, close to a 14-year
high and prices remain highly volatile.
Prices have risen at the pump, too, prompting governments to
take measures to ease the financial pain for consumers: A lower VAT in Sweden,
a price cap in Hungary, or a discount in France.
Gas prices have also skyrocketed, with Europe reference
Dutch TTF leaping to an all-time high at 345 euros on March 7.
The United States, Canada and Britain have announced Russian
oil bans.
The European Union has avoided sanctions on Russia's energy
sector as countries such as Germany rely heavily on Moscow's gas supplies.
Other commodities massively produced in Russia have soared,
including nickel and aluminium.
Auto industry supply chains face disruptions as key parts
come from Ukraine.
Food threat
UN chief Antonio Guterres has warned that the conflict could
reverberate far beyond Ukraine, causing a "hurricane of hunger and a
meltdown of the global food system".
Russia and Ukraine are breadbaskets for the world,
accounting together for 30 percent of global wheat exports.
Prices of cereals and cooking oils have risen.
The UN's Food and Agriculture Organization says the number
of undernourished people could increase by eight to 13 million people over the
course of this year and next.
Ships are not leaving Ukraine and there are concerns about
the upcoming sowing season in the country.
The United States, India and Europe could cover wheat
shortages. But it could be more complicated to replace sunflower oil and corn,
of which Ukraine is the world's number one and number four exporter,
respectively.
Markets rattled
Stock markets had started off 2022 on a good note as
economies recovered from the Covid pandemic and companies posted healthy
results.
But the war has brought volatility to the markets while
Moscow's stock exchange closed for three weeks and only partially reopened on
Monday.
Western sanctions have paralysed the Russian banking sector
and financial system, while the ruble has collapsed.
The measures include efforts to freeze $300 billion of
Russia's foreign currency reserves held abroad.
Russia now faces the risk of defaulting on debt for the
first time in decades.
Moscow paid interest on two dollar-denominated bonds last
week, giving the government some breathing room until the next debt payments in
the coming weeks.
Firms flee
Hundreds of Western firms have closed shops and offices in
Russia since the war started -- due to the sanctions, political pressure or
public opinion.
The list includes famous names such as Ikea, Coca-Cola and
MacDonald's.
Russian President Vladimir Putin has raised the threat of
nationalising foreign-owned companies.
Some companies have chosen to stay in Russia, citing their
social responsibility to not abandon their local employees and deprive the
population of essential goods.
Slower growth
The war threatens to be a drag on the global economic recovery
from the Covid pandemic.
The OECD has warned that the conflict could inflict a
one-percentage-point hit on global growth.
The IMF is expected to lower its growth forecast, which
currently stands at 4.4 percent for 2022.
"The entire global economy will feel the effects of the
crisis through slower growth, trade disruptions, and steeper inflation, harming
especially the poorest and most vulnerable," the IMF, World Bank and
European Bank for Reconstruction and Development (EBRD) warned in a joint statement.
With inflation soaring, analysts fear economies could face a
period of stagflation -- a toxic mix of rising prices and weak growth.
"Even if the war stopped today, the consequences of this conflict would be
felt for months to come, and that would work through commodity prices,"
the EBRD's chief economist, Beata Javorcik, told AFP.
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