![]() ![]() ![]() The top five most vulnerable countries on these measures are Belarus, Lebanon, Kyrgyzstan, Armenia and Uzbekistan. fiscal space, foreign reserves, dependence on food imports, use of renewable energy) to mitigate the negative impacts of external shocks that may emerge from the war. ![]() commodity exports, trade and investment openness) and their resilience (e.g. bilateral trade, investment, migration) their indirect economic exposure to global effects of the war (e.g. We examined the economic vulnerability of 118 L&MICs to the impact of the war by using 27 indicators measuring their direct economic exposure to Russia and Ukraine (e.g. There are likely gains at the aggregate level for countries in the Middle East and North Africa and sub-Saharan Africa, driven by increased global prices for their oil exports. East Asia and Pacific countries – mostly oil importers – might experience the most negative impacts this year, worth $29 billion, followed by South Asia ($15 billion). Based on a likely conservative assumption of a 10% increase in global prices of wheat, food, fuel and metal products over the year, we estimate that the negative impact of the war through trade channels of these products on low- and middle-income countries (L&MICs) to be worth at least $18 billion this year (Raga and Pettinotti, forthcoming). ![]() Both are, however, major suppliers of commodities: wheat, maize, sunflower, fertiliser, fuel and metals, whose prices have sharply increased since the start of the conflict. Russia and Ukraine together account for just 2% of global trade and gross domestic product (GDP), while the stock of foreign direct investment in Russia and by Russia amounts to about 1% of the global total. While the war is for now at least confined to Ukraine, its economic spillover effects will be felt worldwide. The conflict is also having reverberating effects globally, in terms of rising commodity prices, energy shocks and the emerging geopolitical consequences of a conflict in the heart of Europe instigated by a nuclear-armed state and a P5 member of the UN Security Council. ![]()
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