Global focus of the week: Ukraine crisis repeats global problems to worsen
Russian invasion of Ukraine not causing the loss of life and property only But it also has an impact on the money in people’s pockets around the world continuously. When the war broke out, Ukrainian crops could not be exported and sold to nourish the Europeans. resulting in higher food prices In addition, the war caused the price of oil to rise as well. When the production factors and food prices increase, the inflation rate and the consumer index go up accordingly. The people of the world are now experiencing economic consequences as a result of war. which do not know when it will end
soaring oil prices
Rising fuel prices are one of the consequences of the current war between Russia and Ukraine. Looking back on February 23, the day before Russia’s invasion of Ukraine, West Texas crude oil prices were only $92.10 a barrel. It rose to $119.40 a barrel on March 7, its highest price in a year. However, the February 24 crude price may not look very different compared to the price of West Texas crude. Most recently, on April 8, at $97.22 a barrel. which gradually decreased continuously After it was announced from the United States that It will release 1 million barrels per day of US strategic oil reserves for six months since May. And members of the International Energy Organization (IEA) will contribute another 60 million barrels of oil over the next six months. But if comparing the current crude oil price with the price in the same period last year, it was found that quite different As of April 9, 2021, the price of West Texas crude was only $59.32 per barrel. can be said to have almost doubled
Even though the United States and its allies will release oil in reserves to keep oil prices down. But solving this problem is like slowing down the oil price hike. This is not a fundamental change in the oil market.
More intense inflation
Bank for International Settlements (BIS) director Agustin Garstans said the global economy may now be on the edge of a new era of inflation. along with continued growth in consumer prices. This is a result of the global recession and that there is a high risk of uncontrollable rising prices of goods. There will also be no more interest rate hikes than the current plans.
In the statement, the risk of high inflation continues. Mr Garstein said Higher borrowing costs can take years to contain the risks of spiraling prices that have long-term effects on the industrialized world’s economies. However, such predictions are controversial. while other experts warn that Rising inflation could hamper consumer spending and economic growth.
Current data show that Many countries are heading towards 10 percent inflation, largely due to rising oil and gas prices. After President Vladimir Russia’s Putin decides to invade Ukraine in february The consumer price index was 6.2 percent in the UK. The highest since 1990. In March, the consumer price index in Germany and Spain jumped to 7.3 and 9.8 percent, respectively.
The Bank of England is working to raise its base interest rate from 0.75 percent to 2 percent next year, after rising from 0.1 percent in December last year. The Federal Reserve approved a 0.25 percent interest rate increase from nearly zero percent. It was the first rate hike since December 2018, and there have been signs of several more rate hikes this year.
Garstens said the tendency of manufacturers to broaden global supply chains in response to the trade war between the United States and China. and sanctions against Russia This means that production costs will rise for a longer period of time than central banks and Independent economists currently estimate
A study from the German Institute for Research in Economics. (DIW) said that oil prices rose about 20 percent in Germany during March. It will affect consumers in Germany for more than two years, while Germany’s annual inflation rate is up 7.3 percent, the highest increase in 40 years, as energy prices have just soared. due to the Russian invasion of Ukraine The rise in inflation has pushed consumer prices in Germany up 1.5 percent for more than two years, even as oil prices have dropped. As for the impact of the war, such as sanctions General economic development amid the coronavirus pandemic was not included in the study findings. However, it is still debatable whether Will energy sanctions against Russia affect inflation?
Other countries have seen record-breaking inflation and consumer indexes, for example South Korea’s consumer index rose 4.1 percent in March compared to the same period last year. It was the highest in 11 years, while core inflation rose 2.9 percent. Turkey’s inflation rate also jumped 61.1 percent in March, its highest in 20 years, up from the previous month at 61.1 percent. 54.4 percent
The high food price index also broke records.
The Food and Agriculture Organization of the United Nations (FAO) said on April 8 that the world food price index in March rose nearly 13 percent to 159.3, the highest in history. In February, it stood at 141.4, which was the previous record. The war in Ukraine has resulted in continued increases in grain and vegetable oil prices. Because Russia and Ukraine are exporters of wheat, corn, barley and sunflower oil. world’s key by exporting via the Black Sea
Last month, the FAO stated that Food and feed prices could skyrocket by 20 percent amid the crisis in Ukraine. and increases the risk of developing malnutrition
The cereal price index rose 17 percent in March. The high is a new record as well. while the vegetable oil price index rose 23 percent.
The disruption of agricultural exports from the Black Sea region has driven commodity prices up. It hit a record high in 10 years, while sugar and dairy prices rose the same high last month.
even if not in a war zone But still have to fight the effects of the war This is probably the other side of the world in the age of globalization.
