The Russia-Ukraine War has had many long-lasting impacts on not only the countries directly involved but worldwide as well. Countries all around the world have felt the effects of this war and will continue to as long as it carries on. The examples below are just a few of these impacts. There are many other more devastating consequences as well.
The Russian invasion of Ukraine has caused inflationary expectations to soar. CFOs see inflation as one of the most significant future risks. The war has led to surging energy and food prices that are driving a galloping inflation rate and weighing on economic growth and consumer confidence. It's inflicting financial hardship on millions of vulnerable people. Overall, an analysis done by a research manager for Global Macroeconomics at the National Institute of Economic and Social Research suggests the war in Ukraine will add about 2% to global inflation in 2022 and 1% in 2023.
Together, Russia and Ukraine export nearly a third of the world’s wheat and barley, more than 70 percent of its sunflower oil and are big suppliers of corn. Russia is the top global fertiliser producer. 400 million people worldwide rely on Ukrainian food supplies. The UN Food and Agriculture Organization (FAO) projects up to 181 million people in 41 countries could face a food crisis or worse levels of hunger this year.
The escalation of the international armed conflict in Ukraine has caused civilian casualties and destruction of civilian infrastructure, forcing people to flee their homes seeking safety, assistance and protection. Millions of refugees from Ukraine have crossed borders into neighbouring countries, and many more have been forced to move inside the country. A month into the war, more than 3.7 million Ukrainians have fled to neighboring countries – the sixth-largest refugee outflow over the past 60-plus years, according to a Pew Research Center analysis of United Nations data. The UN says more than 12 million people have fled their homes since the start of the Russian invasion.
The immediate effect that the war has had on the supply chain has been the sharp rise in the prices of commodities, including petrol and diesel, which has hit hard. Meanwhile, companies around the world are being forced to find alternative material and labour sources to keep up with demand. Many are now trying to reduce their dependency on Russia and East Europe for raw materials and are instead migrating towards more localised or regional sourcing strategies as a result of these issues.
