One year after Russia invaded Ukraine, the worldwide economy is still feeling the effects.
There are fewer supplies of grain, fertilizer and energy. There is also higher inflation and more economic uncertainty.
But as bad as the war’s impact has been, it could have been worse. Companies and countries in the developed world have been able to survive the difficulties. In developing economies, however, the pain has been worse.
In the United States and other wealthy countries, there has been a rise in consumer prices, caused in part by the war’s effect on oil prices. But the price increase has eased. It has raised hopes that the U.S. Federal Reserve will not raise interest rates in the world’s largest economy. Higher interest rates could lead to a recession.
China also dropped its severe zero-COVID restrictions late last year. The restrictions had slowed growth in the second-largest economy.
Some good luck has helped, too. A warm winter has helped lower natural gas prices and limit the damage from an energy crisis, after Russia largely cut off gas to Europe.
But in ways big and small, the war is causing pain. In Europe, for example, natural gas prices are still three times higher than they were before Russia began its invasion.
High food prices are especially difficult for the poor. The war has affected wheat, barley and cooking oil exports from Ukraine and Russia. The two countries are major suppliers for Africa, the Middle East and parts of Asia where many struggle with hunger. Russia was also the top supplier of fertilizer.
In Nigeria, a top importer of Russian wheat, average food prices increased 37 percent last year. Bread prices have doubled in some places because of wheat shortages.
“People have huge decisions to make,” said Alexander Verhes. He runs Life Flour Mill Limited in Nigeria’s southern Delta state. He added, “What food do they buy? Do they spend it on food? Schooling? Medication?”
Farmer Jose Francisco Sanchez drives a tractor spraying fertilizer on a barley crop in Anchuelo on the outskirts of Madrid, Spain, Tuesday, Feb. 7, 2023. (AP Photo/Paul White)
At least 40 percent of bread bakeries in the Nigerian capital of Abuja shut down after the price of flour jumped about 200 percent.
In Spain, the government is spending 300 million euros to help farmers buy fertilizer. The price of fertilizer has doubled since Russia’s war in Ukraine.
“Fertilizer is vital because the land needs food,’’ said Jose Sanchez. He is a farmer in the village of Anchuelo, east of Madrid.
It all means a slowing world economy. The International Monetary Fund (IMF) dropped growth expectations this year.
The IMF says prices increased 7.3 percent in the wealthiest countries last year. That was above its January 2022 prediction of 3.9 percent. Prices increased 9.9 percent in poorer countries, up from 5.9 percent expected pre-invasion.
In Indonesia’s capital, Jakarta, many street food sellers know they cannot make people pay more money. So some are giving smaller portions instead, in a practice known as “shrinkflation.’’
“One kilogram of rice was for eight portions … but now we made it 10 portions,” said Mukroni who runs a food stand. People, 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.’’
I’m Dan Novak.
Dan Novak adapted this story for VOA Learning English based on reporting by The Associated Press.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
