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The Russo-Ukrainian war wiped out a trillion dollars in global output

Thank you for reading. Read news: Study: Russian-Ukrainian war wipes out $1 trillion in global output

Basrawi News Encyclopedia – Books: Rania Muhammad / A recent report revealed that the war in Ukraine could add 3% to global inflation this year, and wipe out trillions of global GDP by 2023.

The report, prepared by the National Institute for Economic and Social Research (NIESR), stated that the war could wipe out 1% of global gross domestic product, the equivalent of one trillion dollars, by next year.

It comes at a time when markets are bracing for more supply chain chaos due to Russia and Ukraine’s major role in the trade of energy and commodities, from oil and gas to wheat, corn and palladium.

“The cycle of inflation could be inflamed even more if central banks, which is likely, choose to avoid the scourge of war with their monetary policies,” said the Director of the National Institute of Economic and Social Research, Professor Jagjit Shada.

The think tank argued that this would fuel global inflation and pose a risk to economic growth.

He added that while higher oil and gas prices would partially mitigate the impact of sanctions on Russia, the country’s gross domestic product would still contract by 1.5 percent this year and more than 2.5 percent by the end of 2023.

Europe is expected to be the hardest-hit region due to its trade links and dependence on Russian energy and food supplies, with emerging markets affected to a lesser extent than advanced economies.

Chadda added that the think tank expects to increase public spending to “support the massive influx of asylum seekers” from Ukraine and boost military spending, which would limit negative impacts on European GDP.

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While experts believe that the rise in energy prices has escalated fears of “stagflation,” as record oil prices rose above $119 a barrel on Thursday, the highest level since the global financial crisis in 2008, as officials warned that global energy security is under threat amid the crisis. Ukrainian.

Susanna Streeter, senior investment and markets analyst at Hargreaves Lansdowne, said: “Concern is once again spreading in global financial markets with fear of stagflation, as the conflict in Ukraine escalates inflationary pressures and threatens to derail global growth.”

She added that with US President Joe Biden under increasing pressure to stop crude imports from the Kremlin, “a stronger strike on Russia with the boycott will lead to a sharp reversal of financial pain.”

“The concern is that sanctions will do little to break Russia’s immediate resolve, which could lead to a protracted economic conflict,” she added.

The latest preparations came after members of the International Energy Agency agreed to release supplies from their oil reserves, despite Western efforts to exclude oil and gas from their sanctions against Russia.

Meanwhile, there were also fears that the crisis would drive up food prices after the price of wheat reached $10.23 a bushel, a 14-year high.

Corn prices have also risen to the highest level since 2012, when there was a drought in the United States as well as wildfires across Russia and Ukraine.

This comes as Russia and Ukraine represent 20% of the global wheat and corn market, and the Kremlin is the largest source of ammonium nitrate, which is used in fertilizers.

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Experts also believe that the rise in oil and wheat prices paints a bleak picture of inflation, as the conflict upends the global commodity market and sends energy and agricultural prices to their highest levels in years.

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