WASHINGTON, April 26, 2022—The war in Ukraine has dealt a major shock to commodity markets, altering global patterns of trade, production, and consumption in ways that will keep prices at historically high levels through the end of 2024, according to the World Bank’s latest Commodity Markets Outlook report.
The Russian invasion of Ukraine threatens the uneven recovery of developing East Asia and Pacific (EAP) countries. The invasion comes on top of the economic distress caused by the lingering COVID-19 pandemic, the financial tightening in the United States, and the pandemic resurgence and the economic slowdown in China. While commodity producers and fiscally solid countries in the region may weather these shocks with less difficulty, these events will dampen the growth prospects of most economies in the region. Overall economic growth is projected to slow to 5 percent in 2022— 0.4 of a percentage point less than expected in October. If global conditions worsen and national policy responses are weak, growth could ease further.Continue reading
Higher inflation. Slower growth. Tightening financial conditions.
In recent weeks, Russia’s invasion of Ukraine has exacerbated global economic risks. There is a fourth element, however, that could make the mix combustible: the high debt of emerging markets and developing economies.Continue reading