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 – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
