Global growth and inflation have been imperiled by surging commodity prices post Russia Ukraine war, fragile real incomes and disrupted trade and energy lines. Muted European growth, scarce wheat, vegetable oils, some metals and electronic components and evolving Chinese Covid situation weaken global growth. The global economy has been severely impacted by decelerating growth and accelerating inflation.
The IMF has demonstrated that the economic impact of Ukraine war flows through three main channels: 1. Higher prices for commodities, viz., energy, grains and metals and accelerating inflation. 2. Disrupted trade, supply chains and remittances in neighboring countries and surge in refugees. 3. Reduced business confidence and higher investor uncertainty is certain to impact asset prices. These are testing times with unbounded uncertainty all around us necessitating all round care and caution.