Please ensure Javascript is enabled for purposes of website accessibility
War in Ukraine at 1 Year: Pain, Resilience in Global Economy
gvw_ap_news
By Associated Press
Published 1 year ago on
February 15, 2023

Share

Getting your Trinity Audio player ready...

An Egyptian widow is struggling to afford meat and eggs for her five children. An exasperated German laundry owner watches as his energy bill jumps fivefold. Nigerian bakeries have shut their doors, unable to afford the exorbitant price of flour.

One year after Russia invaded Ukraine on Feb. 24, 2022, and caused widespread suffering, the global economy is still enduring the consequences — crunched supplies of grain, fertilizer and energy along with more inflation and economic uncertainty in a world that was already contending with too much of both.

As dismal as the war’s impact has been, there’s one consolation: It could have been worse. Companies and countries in the developed world have proved surprisingly resilient, so far avoiding the worst-case scenario of painful recession.

But in emerging economies, the pain has been more intense.

In Egypt, where nearly a third of the population lives in poverty, Halima Rabie has struggled for years to feed her five school-age children. Now, the 47-year-old widow has cut back on even the most basic groceries as prices keep rising.

“It’s become unbearable,” Rabie said, heading to her job as a cleaner at a state-run hospital in Cairo’s twin city of Giza. “Meat and eggs have become a luxury.”

In the United States and other wealthy countries, a painful surge in consumer prices, fueled in part by the war’s effect on oil prices, has steadily eased. It’s buoyed hopes that U.S. Federal Reserve inflation fighters will relent on interest rate increases that have threatened to tip the world’s biggest economy into recession and sent other currencies tumbling against the dollar.

China also dropped draconian zero-COVID lockdowns late last year that hobbled growth in the second-largest economy.

Some good fortune has helped, too: A warmer-than-usual winter has helped lower natural gas prices and limit the damage from an energy crisis after Russia largely cut off gas to Europe. Still, oil and gas prices were high enough to cushion the impact on the energy-exporting Russian economy from the international sanctions imposed after President Vladimir Putin’s invasion.

‘A Human Catatastrophe’

The war “is a human catastrophe,’’ said Adam Posen, president of the Peterson Institute for International Economics. “But its impact on the world economy is a passing shock.’’

Still, in ways big and small, the war is causing pain. In Europe, for example, natural gas prices are still three times what they were before Russia started massing troops on Ukraine’s border.

Sven Paar, who runs a commercial laundry in Walduern, southwest Germany, is facing a gas bill this year of about 165,000 euros ($176,000) — up from 30,000 euros ($32,000) last year — to run 12 heavy-duty machines that can wash 8 tons of laundry a day.

“We have passed the prices on, one to one, to our customers,” Paar said.

So far, he has been able to keep his customers after showing them the energy bills that accompany the price increases.

“Fingers crossed, it’s working so far,” he said. “At the same time, the customers groan, and they have to pass the costs on to their own customers.”

While he’s kept his steady customers, they’re offering less business. Restaurants with fewer customers need fewer tablecloths washed. Several hotels closed in February rather than pay heating costs during their slow season, meaning fewer hotel sheets to clean.

Punishingly high food prices are inflicting particular hardship on the poor. The war has disrupted wheat, barley and cooking oil from Ukraine and Russia, major global suppliers for Africa, the Middle East and parts of Asia where many struggle with food insecurity. Russia also was the top supplier of fertilizer.

While a U.N.-brokered deal has allowed some food shipments from the Black Sea region, it’s up for renewal next month.

In Egypt, the world’s No. 1 wheat importer, Rabie took a second job at a private clinic in July but still struggles to keep up with rising prices. She earns less than $170 a month.

Rabie said she cooks meat once a month and has resorted to cheaper byproducts to ensure her children get protein. But even those are becoming harder to find.

The government urged Egyptians to try chicken feet and wings as an alternative source of protein — a suggestion met with scorn on social media but that also led to a spike in demand.

“Even the feet have become expensive,” Rabie said.

In Nigeria, a top importer of Russian wheat, average food prices skyrocketed 37% last year. Bread prices have doubled in some places amid wheat shortages.

“People have huge decisions to make,” said Alexander Verhes, who runs Life Flour Mill Limited in the southern Delta state. “What food do they buy? Do they spend it on food? Schooling? Medication?”

At least 40% of bakeries in the Nigerian capital of Abuja shut down after the price of flour jumped about 200%.

“The ones still in the business are doing so at breaking point with no profits,” said Mansur Umar, chairman of the bakers’ association. “A lot of people have stopped eating bread. They have gone for alternatives because of the cost.’’

In Spain, the government is spending 300 million euros ($320 million) to help farmers acquire fertilizer, the price of which has doubled since the war in Ukraine.

“Fertilizer is vital because the land needs food,’’ said Jose Sanchez, a farmer in the village of Anchuelo, east of Madrid. “If the land does not have food, then the crops do not grow up.”

It all means a slowing global economy. The International Monetary Fund dropped growth expectations this year and in 2022 that equates to about $1 trillion in lost production. Europe’s economy, for example, “is still experiencing significant headwinds” despite a drop in energy prices and is at risk of falling into recessio n, said Nathan Sheets, global chief economist at banking giant Citi.

The IMF says consumer prices jumped 7.3% in the wealthiest countries last year — above its January 2022 forecast of 3.9% — and 9.9% in poorer ones, up from 5.9% expected pre-invasion.

In the U.S., such inflation has forced businesses to be nimble.

Stacy Elmore, co-founder of The Luxury Pergola in Noblesville, Indiana, said the cost of providing health insurance for eight workers has spiked 39% over the past year — to $10,000 a month. Amid a labor shortage, she also had to raise hourly wages for her top installer from $24 to $30 an hour.

Inflation-whipped consumers began to balk at paying $22,500 for a 10-by-16-foot louvered pergola — kind of a gazebo without walls — that was sold through dealers. Sales sank last year. So Elmore pivoted to do-it-yourself models, selling directly to shoppers at a sharply reduced price of $12,580.

“With inflation so high, we’ve worked to broaden the appeal of our products and make them easier for the average person to acquire,” Elmore said.

In the Indonesian capital, Jakarta, many street vendors know they can’t pass along surging food prices to their already struggling customers. So some are skimping on portions instead, a practice known as “shrinkflation.’’

“One kilogram of rice was for eight portions … but now we made it 10 portions,” said Mukroni, 52, who runs a food stall and like many Indonesians goes by only one name. Customers, he said, “will not come to the shop” if prices are too high.

“We hope for peace,” he said, “because, after all, no one will win or lose, because everyone will be a victim.’’

RELATED TOPICS:

DON'T MISS

$11M State Grant Will Help Fresno’s Emergency Shelter Beds, Mental Health Services

DON'T MISS

City Council Finally Gives New NW Fresno Costco a Green Light

DON'T MISS

Prop 47 Reformers Send Nearly a Million Signatures to Sacramento

DON'T MISS

BTC Scammy Scams, Impact of Blockchain on Global Markets: Crypto The WonderDog Show

DON'T MISS

US Vetoes Full United Nations Membership for Palestine

DON'T MISS

Barbara Corcoran: 1% Interest Rate Drop Will Send Housing Prices ‘Through the Roof’

DON'T MISS

Cavinder Twins Are Returning to Miami for Their Last Season

DON'T MISS

California Sets Long-Awaited Drinking Water Limit for ‘Erin Brockovich’ Contaminant

DON'T MISS

Savannah Bananas Dominate Social Media, Sell Out Stadiums Nationwide Including Fresno

DON'T MISS

Biden is Off on Details of His Uncle’s WWII Death as He Calls Trump Unfit to Lead the Military

UP NEXT

US and UK Issue New Sanctions on Iran in Response to Tehran’s Weekend Attack on Israel

UP NEXT

Netanyahu Dismisses Calls for Restraint, Says Israel Will Decide Iran Attack Response

UP NEXT

Storm Dumps Record Rain and Floods Dubai’s Airport

UP NEXT

Myanmar’s Ousted Leader Suu Kyi Moved From Prison to House Arrest Due to Heat, Military Says

UP NEXT

The Latest | World Leaders Urge Israel Not to Retaliate for the Iranian Drone and Missile Attack

UP NEXT

US Shoots Down Iran-Launched Attack Drones as Biden Team Pledges ‘Support’ for Israel

UP NEXT

A Mission of Mercy, Then a Fatal Strike: How an Aid Convoy in Gaza Became Israel’s Target

UP NEXT

Israeli Settlers Rampage Through a West Bank Village, Killing 1 Palestinian and Wounding 25

UP NEXT

US Intelligence Finding Shows China Surging Equipment Sales to Russia to Help War Effort in Ukraine

UP NEXT

More Aid Is Supposed to Be Entering the Gaza Strip. Why Isn’t It Helping?

BTC Scammy Scams, Impact of Blockchain on Global Markets: Crypto The WonderDog Show

6 hours ago

US Vetoes Full United Nations Membership for Palestine

7 hours ago

Barbara Corcoran: 1% Interest Rate Drop Will Send Housing Prices ‘Through the Roof’

7 hours ago

Cavinder Twins Are Returning to Miami for Their Last Season

8 hours ago

California Sets Long-Awaited Drinking Water Limit for ‘Erin Brockovich’ Contaminant

9 hours ago

Savannah Bananas Dominate Social Media, Sell Out Stadiums Nationwide Including Fresno

10 hours ago

Biden is Off on Details of His Uncle’s WWII Death as He Calls Trump Unfit to Lead the Military

11 hours ago

Big Names in Rap, Christian Music, and Comedy Headline Must-See Weekend Entertainment

12 hours ago

US and UK Issue New Sanctions on Iran in Response to Tehran’s Weekend Attack on Israel

12 hours ago

Will State AG Rob Bonta Jump Into 2026 Race for CA Governor?

12 hours ago

$11M State Grant Will Help Fresno’s Emergency Shelter Beds, Mental Health Services

Fresno got a $10.9 million piece of California grant money to shelter people living in encampments. The money from California’s $192 m...

5 hours ago

5 hours ago

$11M State Grant Will Help Fresno’s Emergency Shelter Beds, Mental Health Services

5 hours ago

City Council Finally Gives New NW Fresno Costco a Green Light

5 hours ago

Prop 47 Reformers Send Nearly a Million Signatures to Sacramento

Crypto the WonderDog Show
6 hours ago

BTC Scammy Scams, Impact of Blockchain on Global Markets: Crypto The WonderDog Show

7 hours ago

US Vetoes Full United Nations Membership for Palestine

7 hours ago

Barbara Corcoran: 1% Interest Rate Drop Will Send Housing Prices ‘Through the Roof’

8 hours ago

Cavinder Twins Are Returning to Miami for Their Last Season

9 hours ago

California Sets Long-Awaited Drinking Water Limit for ‘Erin Brockovich’ Contaminant

MENU

CONNECT WITH US

Search

Send this to a friend