New Delhi: Mahindra Group chairperson Anand Mahindra Sunday remarked on the bloodbath in the Indian markets triggered by the Russia-Ukraine conflict. "Physical battle (of war) may be in one country, but the political, economic, cyber, social media & commodity resource battle lines have been drawn & are global. Welcome to World War in the 21st century," Anand Mahindra tweeted on Monday.
Late last week, IMF had warned that Russia’s war with Ukraine, which completed 12 days today, and the subsequent sanctions imposed upon President Vladimir Putin’s country will have a “severe impact” on the global economy.
How will this affect the world?
To understand how the Russian invasion of Ukraine will cause repercussions worldwide, it is important to look at certain statistics:
Russia exports 6.5 million barrels of oil in a day and is responsible for 17% of natural gas production. Russia and Ukraine put together account for 29% of all wheat exports and they also account for 75% of sunflower oil export. Ukraine is also a major supplier of corn and barley.
Ukrainian men have been forced to give up farming, either to join the army or flee for dear life. Before the war started, just concerns about the possibility of war resulted in a 55% surge in wheat prices. If the war prolongs, countries that rely on affordable wheat exports from Ukraine could face shortages starting in July, according to International Grains Council director Arnaud Petit. This could lead to food insecurity in developing and underdeveloped countries where poverty is rampant and diets are largely dependent on rice and wheat products.
The world has already started feeling the repercussions of sanctions imposed on Russia as, on Monday, Brent crude oil price of a barrel touched a 14-year high of $130.
In January 2022, US consumer prices rose 7.5 per cent from the year earlier, the biggest such jump since 1982. In Europe, figures from last week show inflation accelerated to a record 5.8 per cent compared with a year earlier.
The Ukraine war coincides with a high-risk moment for the Federal Reserve and other central banks, which were caught off-guard by the surge in inflation over the past year. This has led to food prices being at their highest levels since 2011 and the war would increase the cost even more and reduce food supplies. COVID-19 pandemic also played a huge role in wrecking the global economy over the last two years.
READ: Ordeal of Indian man running away from war with pregnant Ukrainian wife
