The Russia-Ukraine war will complete a full year on February 23 this year. And, there is no sign of the war coming to an end any time soon. The armed conflict between the two East European neighbours is becoming deadlier by the day. As of January 29, this year, the UN Office of the High Commissioner for Human Rights verified a total of 7,110 civilian deaths. Of them, 438 were children. Furthermore, 11,547 people were reported to have been injured. However, the UN agency specified that the real numbers could be higher. The world’s richest countries are continuing to fuel the Russia-Ukraine war by endlessly supplying military and economic aid to Ukraine to fight the war on their behalf even at the cost of their respective economies. The war has impacted the economy of the entire world. Barring Saudi Arabia and India, almost all other global economies witnessed poor economic growth in 2022. An estimate by the Organisation for Economic Co-operation and Development (OECD) shows that Saudi Arabia’s GDP growth in 2022 was around 10 percent and India’s was seven percent.
The punishing economic impact of the Russia-Ukraine war on the world, coming soon after the effect of the coronavirus-led pandemic on the global economy, seems to have little influence on the aggressive postures by the West to fuel the conflict. Military and financial aids are constantly pouring into Ukraine from NATO countries to force Kyiv to hold the fort. The total foreign aid to Ukraine to fight the war would be over three times the country’s annual defense budget. OECD’s recent Economic Outlook said the war is creating “serious headwinds for the global economy”. The global economy is expected to further slowdown in 2023 and 2024 as the massive energy shock triggered by the war continues to spur inflationary pressures, sapping confidence and household purchasing power and increasing risks worldwide. OECD projected that the global economy would grow well below the outcomes expected before the war – at a modest 3.1 percent in 2022, before slowing to 2.2 percent in 2023 and recovering moderately to a still sub-par 2.7 percent pace in 2024.
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The World Bank report said economic activity will remain deeply depressed through 2023, with minimal growth of 0.3 percent expected during the year, as energy price shocks continue to impact the region. Regional output is expected to contract by 0.2 percent in 2022, reflecting above expectation growth in some of the region’s largest economies and the prudent extension of pandemic-era stimulus programs by some governments. Ukraine’s economy was projected to contract by 35 percent in 2022. Its economic activity is scarred by the destruction of productive capacity, damage to agricultural land, and reduced labor supply as more than 14 million people are estimated to have been displaced. According to World Bank estimates, recovery and reconstruction needs across social, productive, and infrastructure sectors total at least USD 349 billion, which is more than 1.5 times the size of Ukraine’s pre-war economy in 2021. As the situation stands now, NATO, not Ukraine, is in total control and the war is unlikely to stop soon even at the risk of further global economic slowdown, diminishing trend of global currency hegemony by US Dollars and Euros, and a possible nuclear strike.
