The Ukraine war cools the world economy – NRK Urix – Foreign news and documentaries

The IMF believes the war will cool growth, and especially affect the poor who will struggle with more expensive food and fuel.

The pace of the world economy was high in the reopening year of 2021. In January, the IMF estimated that global value creation would be 4.4 per cent this year.

Now the IMF is not quite so optimistic. They believe that growth globally ends at 3.6 percent.

The main reason is Russia’s invasion of Ukraine. Energy and raw material prices have skyrocketed. Extensive sanctions have been imposed on Russia.

Germany is expected to have significantly lower growth this year. The country is highly dependent on imports of natural gas and other energy carriers from Russia, and is affected by the high energy prices.

Photo: Martin Meissner / AP

Looks extreme brake in Ukraine

of Russia invasion of Ukraine in late February has sent energy and commodity prices skyrocketing, while the sanctions are slowing down Russian trade with the outside world.

The worst war is affecting the economies of Ukraine and Russia, according to the IMF:

  • Will the economy of Ukraine plunge by 35 percent this year. Although the war would end soon, the IMF believes that the war will slow down growth for years to come.
  • The Russian economy will shrink by 8.5 percent, because the sanctions hit the country hard.
  • The European economy will grow by 2.8 percent this year, which is 1.1 percentage points less than the IMF thought in January. One of the reasons is that the EU will become less dependent on Russian coal, gas and oil.

COVID-19 outbreak in Shanghai

The million-dollar city of Shanghai has been shut down for weeks as a result of corona eruptions.

Photo: STRINGER / Reuters

Infection in China

Since the New Year, the boom in omikron in China has led to new shutdowns. Several of the world’s most important hub for trade, such as Shanghai, is affected.

The IMF believes China’s economy will grow by 4.4 percent this year, up from 8.1 percent last year.

The IMF believes that zero tolerance for infection and trouble in the real estate sector will also slow down the demand for raw materials, and contribute to weaker growth in the rest of Asia.

China Pacific Trade Group

China’s shutdowns as a result of the omicron variant of the coronavirus could have significant consequences for the global flow of goods.

Photo: AP

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