UNCTAD, the United Nations World Trade Organisation (WTO), downgraded its forecast for global economic growth in 2022 to 2.6% from 3.6% due to the war in Ukraine and changes in macroeconomic policies made in recent years and months - so who are some of the biggest winners and losers in this scenario?
In the March 24 Trade and Development report, UNCTAD says that while Russia will experience a deep recession this year, growth is expected to slow significantly in parts of Western Europe and Central, South and Southeast Asia.
According to In, the report points out that the ongoing war in Ukraine is likely to intensify the trend of monetary tightening in advanced countries after similar moves that began in late 2021 in several developing countries due to inflationary pressures, with spending cuts also expected in the coming budgets.
The authors express concern that a combination of weakening global demand, inadequate international policy coordination and rising debt levels from the pandemic could create financial waves that could push some developing countries into a downward spiral.
None-the-less, Greek Finance Minister Christos Staikouras said last week that he did not “at the moment” expect the Ukraine crisis to derail Greek economic growth.
The Greek economy is forecast to grow by around 4.5% to 5% this year.
According to Greek bankers and prominent economists, the growth rate in 2021 will eventually stand at 8.5 percent, far higher than the 4.5-percent forecast a year ago.
After recording a 9-percent economic plunge in 2020, according to the Hellenic Statistical Authority, the recovery was viewed as an encouraging sign by analysts.
This has put Greece on good course to continue to grow healthily despite the war in Ukraine.
However, the COVID-19 pandemic in the last two years had already reduced financial leeway of the developing countries' and increased their debt, and on top of that they have to face the rise in prices of fuels, of food and fertilisers?
That's a very difficult problem, said Rebeca Grynspan, secretary-general of the United Nations Conference on Trade and Development (UNCTAD), which helps developing countries integrate into the global economy.
To add to the problems the cost of freight has shot up by 34 percent ever since Russia invaded Ukraine on February 24, according to UNCTAD.
Transportation issues and global supply chain disruptions are also driving costs and prices upwards.
Developing countries, like Pakistan which is already reeling under unprecedented price rise, will not be able to cope without help and need solutions for their liquidity and debt problems or they stand the risk of seeing their economies running to the ground due in part to towering debt servicing levels, said Grynspan.
UNCTAD has recommended greater, more concessional and less conditional, multilateral financial support for developing countries; immediate debt relief for Ukraine along with renewed discussions on a multilateral mechanism that promotes the fair and orderly restructuring of developing country sovereign debt during periods of severe financial stress; more use of special drawing rights to supplement official reserves and to provide liquidity on a timely basis to avoid severe deflationary adjustments.
It has also recommended more effective and less ad hoc swap arrangements between central banks to support developing country currencies and address financial crises, and sector-specific policies including price controls and subsidies, to tackle the supply-side and mark-up pressures on inflation.
Even without lasting financial market disruptions, developing economies will face severe constraints on growth. During the pandemic, their public and private debt stocks have increased. And issues that receded from view during the pandemic, including high corporate leverage and rising household debt in middle-income developing countries, will resurface as policy tightens.
The war has put further upward pressure on international prices of energy and primary commodities, stretching household budgets and adding to production costs, while disruptions to trade and the effects of sanctions are likely to have a chilling effect on long-term investment, said UNCTAD.
Petros Aramidis is a geopolitical analyst based in Athens.