World Bank: Ukraine War ‘Multiplied Risks’ for Mideast Poorer Countries

Date: 15 April 2022 - 22:31

News ID: ۱۰۱۶۲۵

CAIRO (Middle East Eye) – The war in Ukraine is likely to exacerbate global inflationary pressures that have driven food and energy prices higher, putting greater pressure on poorer countries in the Middle East and North Africa, the World Bank says.
In its April 2022 report, the Bank said the war had “multiplied risks” for poor households. Russia and Ukraine are major exporters of grain to the region. Between them, they account for 80 percent of Egypt’s wheat imports, and more than 90 percent of Lebanon’s imported grain.
“It is widely accepted that rising food prices, especially wheat prices, are likely to raise inflationary pressures and increase food insecurity in MENA countries,” the Bank said.
The pain caused by the price surge will be felt more in countries unable to rely on higher oil prices to cushion the blow, such as Egypt and Lebanon, and will fall on poorer households that spend a larger share of their income on food and energy.
“Rising food prices may have far-reaching effects beyond increasing food insecurity,” said the report, adding: “Historically in MENA, increases in bread prices have... contributed to increased social unrest and conflict.
“This link between food prices, conflict and low growth poses a serious concern for the humanitarian crisis in fragile, conflict and violence-affected states in MENA,” it said.
The report said that economic growth in the Middle East is likely to diverge between oil exporting states benefiting from higher prices and net food and energy importers stung by surging commodity prices.
The Bank forecasts GDP in the region will rise 5.2 percent this year - the fastest rate since 2016 - after an estimated 3.3 percent expansion last year and a 3.1 percent contraction in 2020, while warning that growth prospects were “uneven and uncertain”.