One year after Russia’s invasion of Ukraine, the economic, social, geopolitical, energy and diplomatic effects do not subside, with little hope that the conflict will end soon. The war has generated uncertainty in different sectors and a global imbalance, increasing tensions due to warnings, risks and unions for and against the countries in conflict.
One year after Russia’s invasion of Ukraine, the economic, social, geopolitical, energy and diplomatic effects do not subside, with little hope that the conflict will end soon.
The war has generated uncertainty in the different sectors and an imbalance at a global level, increasing tensions due to warnings, risks and unions for and against countries in conflict.
(You may be interested in: Oil, Colombia’s token after a year of war in Ukraine).
Portfolio consulted different experts to capture the effects of the war globally and in the region.
According to Theodore Kahn, associate director of Control Risks, the Russian invasion of Ukraine had significant effects on global commodity markets, due to the importance of these economies in the global supply of oil, corn, wheat and other products.
“This was manifested in the first instance in the high levels of inflation in the region, especially in countries that depend on imports of these products. Then, the scenario of high international prices for energy products and food had implications for public finances, since many governments in the region continue to subsidize fuel.Kahn said.
(Also: What support is China giving Russia in the war with Ukraine).
It should be noted that the war has caused a crisis in the energy sector, since Russia supplied the gas to Europe and since the conflict this supply was suspended; This brought different effects on the economy of fuels. Faced with this, Munir Jalil, chief economist for the Andean region of BTG Pactual, stated that “the end of the shipment of Russian gas to Europe led to very significant increases in coal and oil, which benefited producing countries such as Colombia, but harmed net importers of these products such as Chile”.
This is how Mauricio Jaramillo, also an expert, who is also a professor at the Universidad del Rosario, indicated that the most serious part of this conflict is the slowdown in the energy transition.
“It will be very difficult to justify this transition, which was an objective of several states, with oil prices that are going to remain high and with new incentives for the extractive industry.”, he explained.
(More: Heineken says it expects to pull out of Russia in 2023.)
The conflict has spread more than expected, according to Alejandro Useche, a professor at the Universidad del Rosario, who also indicates that this war has generated more profound effects than expected in social and economic matters in the world.
“It can be recognized that this year uncertainty has increased, which translates into the reduction of the necessary conditions to carry out business to consume, in such a way that it has been one of the elements that has put a brake on the recovery of the planet post-pandemicUseche said.
Additionally, the professor highlights the impact of the war on raw materials for energy such as coal, oil and gas.
“Russia is one of the world’s major players in this matter, which has an effect especially on the European market.“, held.
One year after the Russian invasion of Ukraine, the collateral effects of the conflict are still being felt in the world economy.
EFE
Inflation in Latin America
The challenge of war has not only undermined nearby countries, it has also generated inflationary pressures in Latin America.
Faced with this aspect, the associate director of Control Risks indicated that, despite the incidence of the war on inflation, it will go down in the region, but not fast enough. “The external pressure on prices will diminish, but global commodity prices remain at high levels. Central banks will be very aware of this and interest rates will remain high in economies such as Colombia, Chile, and Brazil.”, he indicated.
For his part, Jalill, assured that “With the exception of Colombia, the rest of the countries have already reached the inflationary peak and it is expected that in all of them we will see decreases in inflation this year”.
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However, Professor Useche indicated that although all the countries in the region are taking the lead in lowering inflation, “there is still a panorama of uncertainty in the sectors of interest to consumers, so inflation may begin to subside, but it will do so more slowly than we expect“, he claimed.
The effects of the war on Colombia’s agriculture
Despite the remoteness of the countries in conflict, the war has also affected sectors in Colombia, such as agriculture. According to Andrés Valencia, ex-minister of this portfolio, the market remains puzzled, particularly by the price of fertilizers.
“They have not fallen enough, perhaps because of the exchange rate, and this could cause the levels of fertilization in Colombia to drop, because it is an effect that can be seen in the behavior of imports,” he claimed.
For this reason, the former official explains that Fertilizer imports during 2022, which reached 1.7 million tons, fell by about 20% in volume, while in value compared to 2021, 40% more was paid.
“They still have to check if the subsidy that the Government is giving is working so that fertilization is not discouraged“, said.
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