However, more than 100 days after the war, the Russian president’s warfare clearly had the strongest impact on world prices since any geopolitical developments since the oil shocks of the 1970s. A new report from the Organization for Economic Co-operation and Development compares current forecasts for inflation, growth, income and living standards with forecasts for the end of 2021, to present a pre- and post-perspective perspective on how Russia’s warfare is affecting the entire world economy. The impact is intense and is likely to get worse, not better. The pre-war year-on-year inflation forecast for the 38 OECD member countries was 4.4%. It is now twice that, at 8.8%. The United States, which is battling 8.3% inflation, is actually doing better than many other countries. Eastern European countries close to the war zone, such as Poland, Latvia and Estonia, are on double-digit inflation. The inflation forecast for the United Kingdom is 8.8%. In Turkey, which is already flooded with monetary policy mistakes, inflation has skyrocketed from 24% before the war to 72% now. World food and oil prices. Source: Organization for Economic Cooperation and Development War in one country causes economic pain almost everywhere for a number of reasons. The United States and many nations in Europe and elsewhere have imposed harsh sanctions on the Russian economy to punish Russia for its barbarism, and this is causing significant collateral damage. Russia is the world’s largest oil and gas producer, and while Russia continues to export energy, sanctions have curtailed Russian sales, leaving a supply shortfall as the global economy recovers from the COVID pandemic, which boosts demand. for energy. “We were already in a tightening market last year,” said Raoul LeBlanc, vice president of energy practice at S&P Global. “The COVID pandemic dropped a lot of capacity and the recovery was quick. “It’s difficult to restart a system and in the meantime people want to get back on the planes and take a vacation.” The story goes on Oil markets could become tighter, driving prices even higher. Europe plans to phase out 90% of its Russian oil markets by the end of the year, shifting to different suppliers or other types of energy. Russia will be able to sell part of this product at a discount to other buyers, such as China and India. However, S&P Global estimates that Russia’s supply of oil and petroleum products to world markets could fall by 20% to 25%, as demand in China rises as strict COVID lockdowns stop there. Other countries could slowly boost production to offset the high prices, but there is no criterion that can be turned to flood the market with new oil.
A “cost of living crisis”
Energy is a major input to transportation, manufacturing, food production and many other things. Thus, rising energy costs increase the cost of other products, including basic necessities such as food. This problem is exacerbated by Russia’s blockade of Ukraine’s Black Sea ports, which is blocking shipments of cooking oil, barley, wheat and corn to areas such as Africa and the Middle East that depend on Ukraine for food exports. [Follow Rick Newman on Twitter, sign up for his newsletter or send in your thoughts.] Russia is also a major food exporter, and while no one imposes sanctions directly on food, economic sanctions make it difficult for Russia to export almost everything. The sanctions also affect Russian exports of certain fertilizer compounds, which has more than doubled the cost of fertilizers and added to the cost of growing food away from Russia or Ukraine. The OECD calls this a “cost-of-life crisis” and says, “The war in Ukraine has dashed hopes of a rapid end to rising inflation from COVID-19-related supply bottlenecks observed throughout the global economy in 2021 and at the beginning of 2022. Consumer price inflation will peak later and at higher levels than previously predicted “. The World Bank recently warned of global “stagnant inflation”, with many countries falling into recession this year. The main cause is the war in Russia. Most economists see a slowdown in growth in the United States, but not a recession, as unemployment remains extremely low. Europe, which is more dependent on Russian energy, is likely to do worse, and developing countries could face immediate crises. A May report by the Eurasia Group and DevryBV Sustainable Strategies estimates that the loss of food exports from Ukraine and Russia will increase the number of people suffering from food insecurity by 101 million by the end of 2022 and the number living to extreme poverty at 201 million. Putin probably does not mind, and some analysts believe that destabilizing countries seeking to punish Russia with sanctions is part of his war strategy. Putin also probably knows that it could become politically more difficult to maintain sanctions on Russia when it inflicts painfully high energy and food costs on consumers who are not accustomed to such difficulties. In this sense, sanctions are a battle of attrition in which Russia hopes to show that it can suffer more, for more, than the nations trying to punish it. Here in the United States, Biden’s rhetoric about Putin’s price increases is becoming more legitimate as the damage increases. That may not help, though. Polls suggest Americans believe Putin’s war in Ukraine is pushing prices higher, but they believe Biden’s policies are the No. 1 cause, which is a big reason for Biden’s poor acceptance rating. Russia, for its part, is also experiencing inflation, with some consumer goods costing 50% or 60% more than they did before the war. But it should probably be much worse than that for Putin, a dictator, to have any problems with the public. Russia can stand the pain, at least for a while. Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjewman. Read the latest financial and business news from Yahoo Finance Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard and LinkedIn
title: “The Rise In Putin S Price Is Real And Huge " ShowToc: true date: “2022-12-20” author: “Ellie Coates”
However, more than 100 days after the war, the Russian president’s belligerence has clearly had the strongest impact on world prices since any geopolitical developments since the oil shocks of the 1970s. A new report from the Organization for Economic Co-operation and Development compares current forecasts for inflation, growth, income and living standards with forecasts for the end of 2021, to present a pre- and post-perspective perspective on how Russia’s warfare is affecting the entire world economy. The impact is intense and is likely to get worse, not better. The pre-war year-on-year inflation forecast for the 38 OECD member countries was 4.4%. It is now twice that, at 8.8%. The United States, which is battling 8.3% inflation, is actually doing better than many other countries. Eastern European countries close to the war zone, such as Poland, Latvia and Estonia, are on double-digit inflation. The inflation forecast for the United Kingdom is 8.8%. In Turkey, which is already flooded with monetary policy mistakes, inflation has skyrocketed from 24% before the war to 72% now. World food and oil prices. Source: Organization for Economic Cooperation and Development War in one country causes economic pain almost everywhere for a number of reasons. The United States and many nations in Europe and elsewhere have imposed harsh sanctions on the Russian economy to punish Russia for its barbarism, and this is causing significant collateral damage. Russia is the world’s largest oil and gas producer, and while Russia continues to export energy, sanctions have curtailed Russian sales, leaving a supply shortfall as the global economy recovers from the COVID pandemic, which boosts demand. for energy. “We were already in a tightening market last year,” said Raoul LeBlanc, vice president of energy practice at S&P Global. “The COVID pandemic dropped a lot of capacity and the recovery was quick. “It’s difficult to restart a system and in the meantime people want to get back on the planes and take a vacation.” The story goes on Oil markets could become tighter, driving prices even higher. Europe plans to phase out 90% of its Russian oil markets by the end of the year, shifting to different suppliers or other types of energy. Russia will be able to sell part of this product at a discount to other buyers, such as China and India. However, S&P Global estimates that Russia’s supply of oil and petroleum products to world markets could fall by 20% to 25%, as demand in China rises as strict COVID lockdowns stop there. Other countries could slowly boost production to cash in on high prices, but there is no turning point that will flood the market with new oil.
A “cost of living crisis”
Energy is a major input to transportation, manufacturing, food production and many other things. Thus, rising energy costs increase the cost of other products, including basic necessities such as food. This problem is exacerbated by Russia’s blockade of Ukraine’s Black Sea ports, which is blocking shipments of cooking oil, barley, wheat and corn to areas such as Africa and the Middle East that depend on Ukraine for food exports. [Follow Rick Newman on Twitter, sign up for his newsletter or send in your thoughts.] Russia is also a major food exporter, and while no one imposes sanctions directly on food, economic sanctions make it difficult for Russia to export almost everything. The sanctions also affect Russian exports of certain fertilizer compounds, which have more than doubled the cost of fertilizers and added to the cost of growing food away from Russia or Ukraine. The OECD calls this a “cost-of-life crisis” and says, “The war in Ukraine has dashed hopes of a rapid end to rising inflation from COVID-19-related supply bottlenecks observed throughout the global economy in 2021 and at the beginning of 2022. Consumer price inflation will peak later and at higher levels than previously predicted “. The World Bank recently warned of global “stagnant inflation”, with many countries falling into recession this year. The main cause is the war in Russia. Most economists see a slowdown in growth in the United States, but not a recession, as unemployment remains extremely low. Europe, which is more dependent on Russian energy, is likely to do worse, and developing countries could face immediate crises. A May report by the Eurasia Group and DevryBV Sustainable Strategies estimates that the loss of food exports from Ukraine and Russia will increase the number of people suffering from food insecurity by 101 million by the end of 2022 and the number living to extreme poverty at 201 million. Putin probably does not mind, and some analysts believe that destabilizing countries seeking to punish Russia with sanctions is part of his war strategy. Putin also probably knows that it could become politically more difficult to maintain sanctions on Russia when it inflicts painfully high energy and food costs on consumers who are not accustomed to such difficulties. In this sense, sanctions are a battle of attrition in which Russia hopes to show that it can suffer more, for more, than the nations trying to punish it. Here in the United States, Biden’s rhetoric about Putin’s price increases is becoming more legitimate as the damage increases. That may not help, though. Polls suggest Americans believe Putin’s war in Ukraine is pushing prices higher, but they believe Biden’s policies are the No. 1 cause, which is a big reason for Biden’s poor acceptance rating. Russia, for its part, is also experiencing inflation, with some consumer goods costing 50% or 60% more than before the war. But it should probably be much worse than that for Putin, a dictator, to have any problems with the public. Russia can stand the pain, at least for a while. Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjewman. Read the latest financial and business news from Yahoo Finance Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard and LinkedIn
