The world was stunned when war broke out in Ukraine all of a sudden. Russia which has been in confrontation with Ukraine since 2014 launched an offensive in the largest European nation on February 24. Ethnic, geopolitical, and territorial elements came into full play to trigger the Russian-Ukraine war, threatening global peace, order, and economic stability. The consequences of this war will not be confined to the borders of the warring nations. It has spread multiple negative impacts on the world that had just begun to pick up the pieces following the recovery from the COVID-19 pandemic. In addition to the growing human casualties, the war has turned the economic and international relations order upside down. The World Bank has said that the conflict will reduce the estimated global economic growth as it occurred at a time when runaway inflation is taking its toll on the global economy.

The war will push up the energy prices while the disruption of food supplies from these countries will severely hit the poor on different continents. Ukraine is the biggest producer of sunflower followed by Russia. Similarly, the two countries account for 28.9 per cent of global wheat exports. The war has stopped the exports of these commodities from these countries, resulting in the hike of their prices in the international market. Likewise, Russia is the key supplier of fossil fuels and gas to Western Europe. So the fallouts of war will be felt in Europe soon if the energy supply comes to a halt. However, with the loss of the energy market, Russians will also be hit hard because this will deplete the sources of their national income, resulting in the fall of the value of the rouble and price hike of basic goods.

Nepal is far away from Ukraine but it is also set to suffer the potential repercussions of the war because it relies on foreign nations for the supply of gas and oil. It has already been hit by the rising prices of fuels in the international markets and the Ukraine war has brought bad news to the importing nation. Nepal brings edible oil from Ukraine and its price has already gone up after the closure of Ukraine’s ports and multiple sanctions on Russia. According to the news report of this daily published on Sunday, the Russia-Ukraine war would have multiplier effects on the country’s economy such as inflation, unfavourable balance of payment, and shrinking foreign exchange reserves. As its fiscal health is bearing the brunt of the liquidity crunch and COVID-induced business slum, the tell-tale signs of the Ukraine war must not be given short shrift.

Production and transportation costs of commodities are likely to shoot up with the rising fuel prices. And this will give rise to the already ballooning trade deficit, making a big hole in foreign reserves. As the global economy takes a hard knock owing to the war, the flow of remittance and tourists will also drop in Nepal. Of late, Nepal has been importing sunflower oil from Ukraine and exporting it to India by adding value to it. This will have a double whammy – on one hand, the country will be deprived of the newly explored export item and on the other, the inflation will expectedly hit double-digit this year due to the soaring prices of fuels and imported goods, and buoyant dollar.