HOW IS THE GLOBAL ECONOMY AFFECTED DUE TO RUSSIA-UKRAINE WAR GOING ON FOR 1+ YEARS NOW?

ABSTRACT

The Russia-Ukraine war, also known as the Russo-Ukrainian war is a name given to the ongoing tussle between Russia and Ukraine which is going on for more than a year now. The conflict is going on since 2014 between both nations but in the month of February 2022, Russia lost its temper and launched a 360-degree invasion of Ukraine.

This war is not just between two countries, but the whole world is suffering due to this ongoing event. The Global economy is hit hard due to this war as it has largely affected the global trade and Import Export Data of numerous nations that were dependent on these countries for importing and exporting certain goods and services.

TRADE RELATIONS BETWEEN RUSSIA AND UKRAINE BEFORE WAR
YEAR	RUSSIA > UKRAINE	UKRAINE > RUSSIA	REMARKS
2017	USD 7.94 billion	USD 4.91 billion	R(E) > R(I)
2018	USD 9.52 billion	USD 5.46 billion	R(E) > R(I)
2019	USD 6.61 billion	USD 4.83 billion	R(E) > R(I)
2020	USD 6.31 billion	USD 3.69 billion	R(E) > R(I)
2021	USD 8.12 billion	USD 4.15 billion	R(E) > R(I)

 

From the above table, it is clear that Russia exported more goods in terms of value than Ukraine before the war in the past 5 years. Now, as things have got worse, no such trade is expected to happen in many years to come.

HOW IS THE GLOBAL ECONOMY AFFECTED DUE TO THE RUSSIA-UKRAINE WAR?

·        SOARING PRICES OF FOOD GRAINS

The first and foremost adverse effect of this war is the rising prices of food grains. This is happening because, before the war, Ukraine was the nation that was known as the 4^th biggest exporter of corn and wheat across the globe and the nation contributed close to 9% of total wheat exports.

As per the Import Export Data statistics of the nation, Ukraine was also one of the biggest exporters of sunflower oil to the world with a total contribution of 10% in world trade. In total, Russia and Ukraine were the two countries that together exported almost 23% of total wheat exports across the globe.

·        HIGHLY FLUCTUATING OIL PRICES

One of the major adverse effects that shook the global economy and Export Import Data of many countries was the highly changing prices of oils and fuels. Already some nations were not able to afford oil before but as this war advanced, oil prices rose across the globe significantly.

Before the war, Russia was the biggest oil producer and contributed 10% of the complete crude oil exports. Just after Russia attacked Ukraine, the other superpowers of the world, the USA and the UK applied a complete ban on buying oil and gas from Russia which created a further hindrance and problem for other countries.

·        GEO-ECONOMIC FRAGMENTATION

Another threat to the world is that if the war is not ended soon then as per IMF, the geo-economic fragmentation will increase several folds which will further create problems in the future.

IMPACT OF THE RUSSIA-UKRAINE WAR ON THE INDIAN ECONOMY

Just like any other nation in the world, India has also faced backdrops due to this ongoing tussle between Russia and Ukraine. The major impacts faced by Indian Economy are rising oil prices, inflation, economic retardation, energy, and food crisis.

·        Russia was the second-largest exporter of crude oil to India before the war. Due to the war, the prices of oil went up and touched the mark of USD 139/barrel. Although the price was brought down still it was higher than before which made most of the Indian traders reluctant to get oil from Russia.

·        Indian economy started facing inflation soon after the prices of goods imported from Russia and Ukraine got higher. From other countries too, the imports became expensive due to which customers were asked to pay more than before, causing soaring inflation.

·        Just like the prices of crude oil went up, the prices of fuel also went up causing problems in energy consumption. This led to a problem called the energy crisis in the nation.

·        In general, the Export Import Data of the nation got disturbed due to this war as the prices of commercial, as well as consumer goods, grew and caused a fall in demand.

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