Russia’s invasion of Ukraine is already taking a dramatic toll on the world economy and placing a huge swath of the world’s poorest population, the UN said.
“The impact of the war is global and systemic,” UN Secretary-General Antonio Guterres said during a recent briefing. As many as 1.7 billion people are “highly exposed” to the cascading effects of Russia’s war on global food, energy and finance systems.
According to Guterres a “perfect storm” of disruptions to global food, energy and financial markets is a threat for billions around the world. The ongoing coronavirus pandemic, as well as climate change have already set a challenging situation that became even worse after the war in Ukraine.
The region’s importance as a major commodities exporter and the impact of unprecedented sanctions on Moscow are already rattling markets all over the world.
The UN warned that Russia and Ukraine produce about 30% of the Earth’s wheat, with most of the poorest countries relying on them. As a result of the war, food prices are at the highest levels ever recorded by the UN’s Food and Agriculture Organization. Crude oil prices rose 60% in one yea, and fertilizer prices have more than doubled.
According to the WTO, global merchandise trade volume is expected to grow 3% this year, down from the previous forecast of 4.7%, however this figure is to be revised given the uncertainty surrounding the conflict.