World history has seen a lot of wars and global catastrophes, however, the war in Ukraine is becoming one of the most memorable tragedies of the 21st century.
A full-scale invasion of the Russian Federation on February 24 directly affected not just peaceful life in Ukraine but also the global economy.
During the latest years, the world has seen a lot of historically significant developments. The global COVID-19 pandemic caused economic changes worldwide, transforming everything into digital. After this, the world could breathe and live a regular life in the new realities. However, a war in Ukraine 2022 turned everything upside down, and worldwide society found out what the country Ukraine is and how the Ukrainian people keep protecting Europe from the terrorist actions of Russia. The fact that this war could affect the global economy was quite shocking. A lot of people did not even know that Ukraine makes such a big contribution.
So, let us determine the exact factors and sectors that were affected by this war, according to:
United Nations Conference on Trade and Development (UNCTAD) has recently posted a report, according to which, the world economy GDP growth will be 1% lower than expected, caused of the Ukraine war. The most injured sectors are tight food, energy, and financial markets.
Ukraine has always been one of the leading world providers of wheat and barley, talking more specifically, the percentage share of delivery from Ukraine is 30%.
Moreover, Ukraine is not the only country that influences the global economy because of its full involvement. Russia is the top natural gas and oil exporter but the sanctions set back all sorts of deliveries. Some of the developing countries have been suffering the most because of a lack of supply of the necessary resources for full functioning.
The direct consequences are the price growing, which even more strongly affects the lives of ordinary people in different countries. UNCTAD posted a statistic of the FAO Food Price Index from 2019 to 2022. Currently, the possible direction of the situation development seems critical.
The UNCTAD researches predict further escalation of the global crises. Additionally, the post-pandemic causes add even more tension and stress to the situation. The experts expect global climate change, debt distress, food shortages, or even blackouts.
The food crisis is expected to last until 2023. The main cause is the inaccessibility of the needed agricultural inputs.
Moreover, the situation may be escalated in case of the countries close their food markets. Such a decision may cause the domino effect of trade restrictions worldwide.
Ukraine war 2022 may be one of the largest collapses in energy sectors. However, the problems with the energy market are not so clear compared to others.
The oil and gas price increase can lead to investment growth in the extractive industries and fossil fuel-based energy generation. The UNCTAD experts see the risk of the trend toward decarbonization coming back after 5-10 years.
Another way of the situation development may possibly be a speeder of the trend of the alternative energy sources growth.
There is no exact conclusion and the experts cannot predict the further direction of the situation movement.
According to Ukraine war news, the country itself has been financially suffering from the lack of investments and further spending on the rebuilding of destroyed cities. However, the global financial sector has been affected even more.
The main narrative in the current situation is the risk of the global debt crisis. Even before the invasion of Russia in Ukraine, the developing countries spent 16% of their export earnings.
The UNCTAD analysts have registered an even higher level of borrowing around the world since the start of the war.
Moreover, the World Bank decreased its growth forecast for 2022 from 4.1% to 3.2%. The Bank officials stated that the main cause is this war.
At the very beginning of the war, the US economist did not see any big effects on the US economy. However, in a matter of time, the impact was getting more noticeable. According to the Goldman Sachs economists group predicted the US GDP growth in March 2022. From the fourth quarter of 2021 to the fourth quarter of 2022, the growth is expected to be 1.75%. Compared to the growth data in 2021, the difference is significant. The experts calculated a 5.7% growth in the previous year.
Another influential factor is the confident response from the Ukraine supporters. The packs of sanctions beat not just an aggressive country – Russia, but also the supportive ones.
Investors expect global inflation, crises of the unsees unimaginable scale, and unpredictable consequences.
The whole world is watching how this war is going inside Ukraine. And one of the most frequently asked questions – is Ukraine winning the war? The main influential factor, which can upside down the positions is the weapons from the countries-supporters. The Russian army has been always considered to be the second biggest army in the world. That is why Ukraine is asking for help from European countries and the countries-members of NATO, especially.
Ukrainian soldiers stand for their land, families, and lives, but these people need strong and heavy weapons that would allow them to do it more effectively and faster.
Russia has occupied some South territories since February 24. The Ukrainian government officials insist on the inevitability of such turns. According to the Ukraine war latest news, the fighting in the east of the country becomes fiercer. The soldiers fight for every piece of the land.