Global Effects of the Ukrainian War

Global Effects of the Ukrainian War

The Global Crisis Response Group on Food, Energy and Finance published a report on June 8, 2022, on the global impact of the war in Ukraine on food, energy and finance, titled “Billions of People Suffer from the greatest Cost-of-Living Crisis in a Generation” Last March to help the United Nations Secretariat coordinate the global response to the effects of the war in Ukraine on food, energy and global financing systems.

The content of the report: The report addressed five main ideas as follows:

1- The nature of the global living crisis:

The report indicated that the real assessment is that it is a vicious circle of rising costs and prices, weakening the real income and purchasing power of individuals, and there are fears that the cost-of-living crisis turns into social and political instability. The most prominent indicators of the crisis are the following:

  • The food price index increased by 20.8% compared to last year.
  • Fluctuations in energy prices, and expectations of a long-term increase in energy prices in the event the war continues, and increases to reach about 50% in 2022 compared to 2021.
  • The increase in fertilizer prices to double the average prices during the period 2000-2020.
  • The cost of maritime transport has tripled compared to the cost before the Corona pandemic, and this rise is due to the effects of the pandemic, and the negative impact on maritime transport infrastructure, especially in Ukraine, due to war conditions, and high fuel prices.
  • The depreciation of the currency in developing countries, and consequently a decrease in their ability to borrow due to high interest rates and declining investor confidence. After the first 100 days of the war, the currencies of 142 developing countries fell by 2.8% on average, compared to the US dollar, and the bond yield increased by 77 basis points.