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Will the war stop or the world? (The impact of Ukrainian war on the South Asian Economies)
By: Abhishek Chauhan and Manya Arora (Symbiosis International University)
The Russia-Ukraine crisis not only corpsed the humanity but also the economy worldwide. This death crisis was not restricted to the demographics of the two borders but had an impact beyond the physical boundaries of the nations i.e., the South Asian economy was also the one bombarded and shattered during the crisis heavily. How?
Well, during the late February of 2022 started the downfall of the economies worldwide post pandemic again. The months of 2020 already led to the deep diving of the graphs because of the deadly virus spread and shrunk the global economy by almost 6%. This contraction was absorbed and vaccinated through various trade routes and international affairs. But the Ukrainian crisis made this positive growth and turned it back with an expected fall of a bigger numerical percentage in the coming year.
As a major importer of the commodities from round the world, the South Asian countries are susceptible to hovering commodity prices, growing inflation, disrupted and disturbed supply chains and rising poverty. The countries such as India, Bangladesh, Sri Lanka and many others who are major importers of the world produce and major part of supply chains and trade, globally are experiencing a bleak growth in their overall monetary cycles.
The increase in inflation has outstripped the recovery of the real economy. The smaller economies like that of Bhutan and Sri Lanka could see larger shorter-term growth contractions than India and Bangladesh. This impact could be wider than before that of the pandemic because the inflation was already a positively growing number in such countries which is now fuelled up further by the similar shock of the war. This unimaginable occurrence has sped up the process of sharp growth in commodity prices. The EIU was already forecasting global inflation of nearly 6% this year, but now that mark is expected to be exceeded, given the huge spikes. This increasing commodity cost
