Global Economy in the time of RUSSIA-UKRAINE WAR
According to the World Bank's latest Global Economic Prospects report, the global economy is entering a pronounced slowdown after a strong rebound in 2021, owing to new threats from COVID-19 variants and an increase in inflation, debt, and income inequality, which could jeopardise the recovery in emerging and developing economies. According to reports and statistics, global growth will slow significantly from 5.5 percent in 2021 to 4.1 percent in 2022 and 3.2 percent in 2023 as pent-up demand dissipates and global fiscal and monetary support is unwound.
Just what a vulnerable world economy didn't needed at this very moment — A battle that increases inflation, disturbs markets, and portends hardship for everyone from European consumers to indebted Chinese developers, as well as families in Africa and other nations. All thanks to the ongoing war between Russia and Ukraine.
While wars decimate both physical and human resources, the effect of war on GDP per capita is unknown. This problem derives from the way national income accounting regards murder and property destruction during combat. Producing firearms and explosives is a favourably counted, but killing people and damaging property is not.
Russia's war on Ukraine and the West's retaliatory sanctions may not herald a new global slump. The combined GDP of the two countries is less than 2% of the global GDP. Many regional economies are still in good shape, having recovered quickly from the pandemic recession.
Yet the conflict threatens to inflict severe economic damage on some countries and industries — damage that could mean hardships for millions of people. Russia is the world's third-biggest .producer of petroleum and is a major exporter of natural gas.
Nonetheless, the battle has the potential to cause massive economic damage to some countries and businesses, culminating in millions of people being displaced. Russia being the world's third-largest petroleum producer and a major natural gas exporter.
Russia's attack could severely stifle Europe's economic recovery by driving already high energy prices further higher. Also, the war repercussions will spread to other countries across the world.
Ukraine is the world's fifth-largest wheat exporter, but many of the countries that rely on it are already experiencing food shortages as a result of prolonged political unrest, which is exacerbated by blatant bloodshed.
Inflationary pressures will be exacerbated by rising energy and food prices, which governments and central banks are attempting to alleviate. Stocks would have plummeted in expectation of higher interest rates and a possible collapse, and these changes could make financial markets even more volatile in the future.
These were the few named industries which would have a massive effect because of the Russia Ukraine War, and minor effects can be seen in other industries like Transport Industry, Furniture industry, IT Industry & Banking Industry.
There is a risk for the global economy as much as there is risk for the people of Russia, Ukraine & other countries which are directly and indirectly depending on each other. Is war the only solution, as we are all left to wonder?