In its first economic forecast since Russia's invasion it was learned that the war had triggered the greatest supply shock since the early 1970's. This would have a huge impact on economies beyond the area of conflict. "The world economy faced “the greatest supply shock since at least the early 1970s”, it said, pointing out that Russia and Ukraine “supply a disproportionately high share of commodities, including wheat, corn, fertiliser, titanium and nickel”".Previously, Russia was expected to have a growth rate of 3% and Ukraine was expected to have a growth rate of 3.5%. "The latest prognoses “assume that a ceasefire is brokered within a couple of months, followed soon after by the start of a major reconstruction effort in Ukraine,” the multilateral bank said." if this were to happen then Ukraines gross domestic product (war battered) will rebound by 23% next year. With everything going on the it comes with higher uncertainty when it comes to projections which could restrict exports.
All of these consequences could lead up to major recession around world in coming month. It would be interesting to see how US and President Biden will react to it.
ReplyDeleteIt is going to be interesting to see how these decreases their economies will effect other European countries that are reliant on them for natural resources like wheat (Ukraine) and natural gas (Russia). I am assuming that for countries that have cut off Russia completely, this possible recession will be even more difficult.
ReplyDeleteI am curious to see whether or not these numbers increase as the war continues and sanctions continue to effect imports and exports for these countries.
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