By Russia Desk
The global economy suffered $1.6 billion in damage due to grain shortages from Ukraine linked to the military conflict. Ukraine itself suffered damage of $858 million, while damage to Russia from the disruption of grain exports was found to be 200 times less, the scientists concluded in the article, published in perspectives and applied economic policies.
Ukraine is the world’s largest exporter of sunflower oil, the fourth supplier of corn and the fifth supplier of cereals. Economists from the University of Southern California, led by Adam Rose, have decided to assess the damage to the Ukrainian and Russian economies due to a dwindling grain supply amid the ongoing conflict since February 2022 .
In their study, the economists used the general equilibrium model known as GTAP (Global Trade Analysis Project), in which the economy is represented by a set of supply chains whose breaks lead to multiple effects.
The simulation allowed the scientists to draw several important conclusions. Calculations showed that disruptions in grain supply chains caused by hostilities in Ukraine at the end of the year caused damage to the world economy amounting to $1.6 billion, while the Ukrainian economy suffered the most damage – the damage caused by non-delivery of grain was equal to 858 million dollars, or 0.65% of the country’s gross domestic product.
“Unlike Ukraine, for the Russian economy the losses from the disruption of its own exports will amount to only $3.8 million, mainly due to a much lower reliance on trade” , the scientists concluded. The damage caused to the economies of Asian countries by the insufficient deliveries of grain from Ukraine and Russia is estimated at 573 million dollars.
At the same time, the total damage caused to the world economy in the first year of hostilities would have been an additional $590 million if the grain agreement had not entered into force, allowing the Ukraine to export grain by sea through the Black Sea ports, according to the authors of the noted work.
“We analyzed the grain because of its importance to humanity, but this is only the beginning of our research,” Rose explained. “The economic damage becomes more significant when we look at other commodities, such as energy and metals.”
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Source: Economists have assessed the damage caused by the disruption of Ukrainian grain export
