Azerbaijan news

Economic Consequences of Aggression – Everything is heading for a catastrophe

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Economists have commented on the impact of Russia’s total military aggression on Ukraine on the world economy.

Rovshan Agayev writes that, The consequences of economic sanctions on Russia make problems inevitable for the global economy: “The production price index in the euro area has reached an unprecedented level – more than 30 percent on an annual basis. Undoubtedly that, This is primarily the result of a sharp rise in prices for industrial raw materials on commodity exchanges, especially energy carriers. Long-term high on a global scale inflation makes the real sector crisis inevitable. A sharp rise in prices accompanied by an increase in production costs leads to a decrease in consumer demand over time, which in turn poses a risk of supply chain shortages. For example, Japan, South Korea, Germany and Of the United States Russia The closure of many enterprises in the market, from automobiles to the production of high-tech products, and the cessation of exports do not go unnoticed by their aggregate supply of goods and, ultimately, their incomes.

Real sector crisis financial institutions snowcreates a financial crisis in the example of creditors who are unable to fulfill their obligations. This crisis is also large-scale unemployment and poverty, governments social means an increase in the load.

Undoubtedly that, the enormous resources of the sanctions coalition, which accounts for 60 percent of the world economy snowThese losses appear small in the wind. They may even resort to another global economic crisis in exchange for the complete collapse of Russia. But it has about 2 percent of the global economy Russia It is not strong enough to lift the crisis caused by global sanctions. “

Speaker Jafarli notes that, Russia’s aggression against Ukraine has seriously affected the grain market, and prices will rise. Ukraine at least it will not be able to carry out spring sowing in full, which will result in a decrease in wheat production. In 2021 Ukraine It produced 44.8 million tons of grain and exported 24.4 million tons. 14.8 million tons of exported cereals flour and wheat, which is suitable for bread production.

In 2021 Russia reduced wheat exports by 14.4 percent. Russia has both reduced production and imposed export restrictions to protect the domestic market and increase food wheat supplies, doubling export duties.

Azerbaijan’s commodity wheat imports are about 1.5 million tons a year. We buy about half of this volume from Russia, which means that the price of wheat from there will rise again. that, that’s it flourflour products and will result in an increase in the price of bread.

Grain and wheat are a matter of security, we must be able to produce enough ourselves, it is time for wise decisions and coordinated steps. (Innovator)



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