One year of Russia's invasion of Ukraine: the impact on global economy

Its exactly one year since Russia invaded Ukraine. Russian President Putin called it a 'special military operation'. One year on, the war continues and there is no end in sight. As per reports atleast 150,000 people on each side have died.

The ecnomic ramifications have also been immense. Ukraine itself has seen economic output contract about over 30%.

Not just Ukraine, over the past year, the war has caused multiple shocks to the global economy. As per estimates, the war could cost the global economy about $2.8 trillion in terms of lost output.

Russia and Ukraine together constitue a large part of the world's energy and food supply. The war disrupted wheat, barley and cooking oil supplies from Ukraine and Russia, to Africa, the Middle East and parts of Asia.

Infact both countries account for 25% of the world's wheat imports. In fact, Ukraine, known as "breadbasket of the world", was unable to continue with its supplies, sending food prices soaring across the world.

The spikes in energy and food prices led to inflation spiking to a multi-decade high of 9% in the U.S. and over 10% in Europe. The Food and Agriculture Organization says its food price index reached a record high in 2022, up by 14.3% from 2021.

Supply chain disruptions, which were still prevalent from the pandemic, once again saw a set back. As a result, there was a spike in both food and energy prices.

However, now, supply chains have returned to pre-war levels. As per Moneycontrol, the Baltic Dry Index was as high as 5,650 in early October 2021 before it fell to under 1,300 by the end of January 2022. However, the Russia-Ukraine war pushed the index over 3,000 by May 2022. It has since collapsed to under 1,000. This index measures the average price of shipping dry bulk across several routes and is considered a lead indicator of economic activity.

The World Bank has warned that the global economy could slip into recession in 2023.