Tremors of Russian-Ukraine War Will Shake Middle East Economy: World Bank Report
Middle east is feeling in heat that is arising from the ongoing war in Ukraine. Political analysts and economists fear the worst for the Middle Eastern nations who have been dependent on Ukraine and Russia for their various import needs. But the worst hit will be food and grain supplies across Middle East and North of Africa, according to a World Bank report. The war in Ukraine has “multiplied risks” for the Middle East and North Africa’s poorer countries. Worst hit will be prices of food and energy, the World Bank has confirmed, warning of potential social unrest.
Many Middle Eastern nations like Yemen, Syria, Lebanon and Egypt depend seriously on supplies from Ukraine and Russia. The escalation in prices that started in the Covid-19 times had just started to stabilize but the ongoing war is only going to make it worse. “Rising food prices may have far-reaching effects beyond increasing food insecurity,” said the report, adding: “Historically in MENA, increases in bread prices have… contributed to increased social unrest and conflict.
Ukraine is a key source of grain, while Russia is a major producer of energy and fertilizer needed for agriculture. The MENA region is heavily dependent on wheat supplies from both countries. According to the report, inflation in oil-rich Gulf countries is expected to reach 3.0 percent this year compared to 1.2 percent in 2021, and will rise to 3.7 percent in oil-importing countries from 1.4 percent last year.
“For some oil importers, food subsidies would be hard to maintain due to limited resources,” while “rising oil prices could delay reforms,” the report said. Despite that, the World Bank forecasts that economic growth in the region will be 5.2 percent in 2022, the fastest rate since 2016. “The region as a whole is buoyed by oil” and is doing “much better” than any other in the world, lead economist for the MENA region Daniel Lederman told a leading media agency in America.