Many had an optimistic perspective believing that this year would be the final in the COVID-19 era. People wished for the long-awaited time of relief for the global community and economy would soon come. However, with the Russian government launching a full-scale military invasion of Ukraine, many people’s expectations regarding the future improvement of their financial status and life were undermined and destroyed. As the primary measure to localize and de-escalate the conflict and force the Russian Federation to peace, “the US and other Western nations have imposed unprecedented economic sanctions on Russia and announced support for Ukraine” (Solomon & Ha, 2022, para. 2). One can safely say that the new disastrous conflict in Eastern Europe and the financial isolation of such a big and influential resource and agricultural market player will negatively impact the world economic system.
Russo-Ukrainian War and Accelerating Global Inflation
Rising inflation is one type of financial damage that the Russo-Ukrainian War is already doing to many other countries. According to Liboreiro (2022), “inflation in March reached 7.5% on an annual basis,” which is a record for the European Economic Area (para. 2). Given that the current times outside the conflict zone are not of a crisis nature but somewhat of a stagnation one, its rate in the countries of the European Union is beginning to look significant and even catastrophic. Such negative deviations will inevitably affect the macro level of the world economy.
Future Commodity and Wheat Crises
It is no secret that war is such a civilizational phenomenon whose negative socio-economic consequences always outweigh its positive ones. Many experts predict that in addition to high inflation, there will also be a significant increase in prices for commodities, public utilities, and food, wheat products especially (David, 2022). The latter is because both sides of the conflict are also top exporters of wheat in the Eurozone and globally.
References
David, D. (2022). Ukraine war could hit global growth, OECD warns. BBC News. Web.
Liboreiro, J. (2022). Ukraine war pushes eurozone’s inflation to a record 7.5%. Euronews. Web.
Solomon, D., & Ha, L. (2022). War in Ukraine heightens inflation risks and challenges the global economy. Euromonitor International. Web.