World Bank official says war-driven oil price hikes will reduce growth of major importers

The Russian-Ukrainian crisis is expected to inflict further setbacks on growth in emerging markets which are already slow to recover from the COVID-19 pandemic

WASHINGTON, United States — Persistently high oil prices sparked by Russia’s invasion of Ukraine could shave one percentage point off the growth of major oil-importing developing economies such as China, Indonesia , South Africa and Turkey, a World Bank official said on Tuesday. 8.

Indermit Gill, the bank’s vice president for equitable growth, finance and institutions, said in a blog post that the war will cause further setbacks to growth in emerging markets that are already lagging in the post-war recovery. COVID-19 pandemic and grappling with a series of uncertainties from debt to inflation.

“The war has compounded these uncertainties in ways that will reverberate across the world, harming the most vulnerable people in the most fragile places,” Gill said.

“It is too early to tell how much the conflict will alter the global economic outlook.”

Some countries in the Middle East, Central Asia, Africa and Europe are heavily dependent on Russia and Ukraine for food, as these countries together account for more than 20% of global wheat exports.

Gill said estimates from a forthcoming World Bank publication suggest that a 10% rise in oil prices that persists for several years can reduce growth in commodity-importing developing economies by a tenth of a percentage point.

Oil prices have more than doubled over the past six months.

“If it lasts, oil could shave one percentage point off the growth of oil importers like China, Indonesia, South Africa and Turkey,” he said.

“Before war broke out, South Africa was expected to grow by around 2% per year in 2022 and 2023, Turkey by 2% to 3%, and China and Indonesia by 5%.”

Russia calls its actions in Ukraine a “special operation”. –

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