An Egyptian widow has trouble affording meat and eggs for her five children. The owner of a laundromat in Germany is exasperated as his electricity bill multiplies by five. Some Nigerian bakeries close, unable to bear the exorbitant price of flour.
One year after Russia invaded Ukraine on February 24, 2022 and caused widespread suffering, the global economy is still reeling from the consequences: reduced supplies of grain, fertilizer and energy are combined with more inflation and economic uncertainty in a world already dealing with too much of both.
Despite the horror of the war, there is a consolation: it could have been worse. Companies and countries in the developed world have turned out to be unexpectedly resilient and have so far avoided the worst case scenario, a severe recession.
But in emerging economies, the impact has been more painful.
In Egypt, where almost a third of the population lives in poverty, Halima Rabie has struggled for years to feed her five school-age children. Now the 47-year-old widow has cut back on even the most basic foods, and prices continue to rise.
“It has become unbearable,” Rabie said on her way to her job as a cleaner at a state hospital in Giza, Cairo’s twin city. “Meat and eggs have become a luxury.”
In the United States and other wealthy countries, the painful rise in consumer prices fueled in part by the effect of the war on the price of crude oil has subsided steadily. That has fueled hopes that the US Federal Reserve will scale back its war on inflation with interest rate hikes that have threatened to plunge the world’s largest economy into recession and plunge other currencies against the dollar.
China also abandoned its draconian “zero COVID” lockdowns late last year, which had slowed growth in the world’s second-largest economy.
There’s also been some luck: A cooler-than-usual winter has helped drive down natural gas prices and limit the damage from an energy crisis.