The World Bank has lowered the global economic growth rate this year from 4.1 percent to 3.2 percent, nearly 1 percentage point. The main reason is the overall economic impact of the war, and to cope with it, it will also operate a financial program worth $170 billion over the next 15 months. In particular, they added that Europe and Central Asia accounted for a large part of the decline, growing by a whopping 4.1%. They also said that they were most concerned about the situation in developing countries.
Another factor was the high energy, fertilizer, and overall food prices in developed countries, as expected. The World Bank also spoke about inflation. Western sanctions against Russia have raised oil and natural gas prices, forcing inflation. It was also concerned that Ukraine, one of the representative grain storage areas, was suffering from disruptions in food exports.
They also said they were discussing additional financial aid for Ukraine’s reconstruction. With $600 million already in aid to Ukraine, the World Bank is expected to provide $150 million in additional aid. The World Bank is not the only one who has made this prediction. The International Monetary Authority (IMF) also announced that it would “reduce the economic outlook of 143 countries, which account for 86% of the world economy, in the wake of the invasion of Ukraine.”
Natural gas in the U.S. jumped to its highest level in 13 years since October 2008. The impact of the energy market following the invasion of Ukraine simply covered the natural gas market, and the forecast that the temperature this spring will be lower than usual also supported this. As we are not prepared for a strong market in the future, natural gas prices are expected to continue to rise even in the upcoming summer.