Threats and Effects of the Russia-Ukraine War on the Global Economy

Russia launched a full-scale invasion of Ukraine in late February 2022. And unfortunately, it’s not just these two countries that have been affected—even the rest of the world has suffered a major blow. Businesses are scrambling to devise the best strategy and corporate finance management practices to lessen the impact as much as possible. But there are still many threats to the global economy.

·         Inflation

It’s no surprise that inflation has become an even bigger problem after the war. Food, energy, and other major commodities are seeing drastic price increases, affecting emerging markets and developing countries the most. According to the International Monetary Fund (IMF), inflation for emerging markets and developing economies are forecasted to rise by 8.7% in 2022. Meanwhile, advanced economies still suffer from a significantly high inflation rate of 5.7%.

·         The war and COVID-19

The Russia-Ukraine War has come at a time when the world is still recovering from the effects of the Coronavirus pandemic. And sadly, not many countries can say that they have overcome the economic blow dealt by COVID-19. This—coupled with the impacts of the conflict—is only expected to result in substantial economic slowdowns, especially in Asian and African countries.

China has taken aggressive measures to slow the Coronavirus and placed over 50 million people under mandatory quarantine. But there’s no assurance that the same practice could be effective in other countries.

Meanwhile, Indonesia is currently experiencing a sharp rise in palm oil prices, brought by the global shortage of vegetable oil due to the war.

What can you do to mitigate the threats and risks of the war and protect your operations? First, it’s best to conduct strategy and corporate financial planning. A reliable corporate services provider can help you gain better insight into the global market, planning for growth and sustainability.

Furthermore, top strategy and corporate financial planning agencies can transform your business goals into achievable actions, accelerating the process towards your objectives.

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