On Wednesday, June 15, 2022 at 2:06:13 PM UTC+8, David P. wrote:
> Russian Invasion Expected to Keep Inflation High in Rich Countries
> By Paul Hannon, June 8, 2022, WSJ
>
> Russia’s lengthening war with Ukraine will lead to persistently higher inflation rates in rich countries this year and threaten food shortages in poorer countries, according to a new study from the OECD, which also revised down its expectations for global growth.
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> In the latest of four reports on the global economic outlook published each year, the Paris-based Organization for Economic Cooperation and Development called on Western governments to avoid a repeat of the slow and patchy vaccine distribution during the Covid-19 pandemic and act promptly to get food to those in need.
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> “The world is already paying the price for Russia’s aggression,” Laurence Boone, the OECD’s chief economist, said. “The choices made by policy makers and citizens will be crucial to determining how that price will be distributed across people and countries.”
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> In the report released on Wednesday, the OECD said it now expects the global economy to grow by 3% in 2022 and 2.8% in 2023, having anticipated an increase in world output of 4.5% and 3.2% in those years respectively when it last released forecasts in December. Its forecasts are gloomier than those of the International Monetary Fund, which sees an expansion of 3.6% this year and next.
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> The organization lowered its growth forecasts for the U.S. to 2.5% this year and 1.2% next year from 3.7% and 2.4% previously. Some Western economies could face periods of contraction this year if energy prices rise again, or interest-rate rises by central banks that are designed to contain inflation have unintended consequences, Ms. Boone said.
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> But while most economies are set to see weaker growth as a consequence of the war, the OECD expects Russia to suffer a sharp fall in output, of 10% this year and 4.1% next.
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> Moscow’s invasion of its neighbor have pushed global energy prices higher as European countries that support Ukraine seek alternatives to the oil and natural gas they have long imported from Russia. The invasion has also disrupted exports of Ukrainian and Russian wheat, pushing prices of foodstuffs to record highs.
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> That has provided a fresh impetus to inflation rates that were already high as 2022 began. The OECD now estimates that consumer prices in its 38 member countries will rise at an average rate of 9% this year, double the inflation rate it expected to see in December.
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> The pickup in inflation is especially large in a number of European countries. For the Netherlands, the OECD now sees annual inflation averaging 9.2% in 2022, having expected to see prices rise by 3.1% in December. For the U.K., the OECD now sees prices rising at an average annual rate of 8.8%, double the 4.4% increase it projected in December. By contrast, the expected pickup in U.S. inflation is much more modest. At the end of last year, the OECD expected annual average inflation to be 4.4%, and it now sees prices rising by 5.9%.
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> “The peak for most countries should be in the second and third quarters,” said Ms. Boone.
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> The OECD said governments should provide help to poorer households that are suffering the greatest hardship as a result of higher food and energy prices. Ms. Boone said that help would also help ease demands for significantly higher pay rises that could in turn lead to fresh price rises.
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> But the priority for governments should be to address the food shortages that threaten many countries in Africa and the Middle East.
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> “Global cooperation is needed to ensure that food reaches consumers at affordable prices, in particular in low-income and emerging market economies,” said Ms. Boone. “This may require more international aid as well as cooperation in the logistics of shipping and distributing to countries in need.”
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> https://www.wsj.com/articles/russian-invasion-expected-to-double-inflation-rates-11654678800

A lot of poor countries are now angry with US for they have to comply with US sanctions on Russia too. As poor countries they are the ones that suffered the most from the inflation and high prices gas and oil. They know that US can bear themselves by printing more money to pay for import of gas and oil for their high price gasoline which is now at 5 dollar and will be going up to 6 dollar or even 10 dollar per gallon.

Middle-class Americans have no problems with paying them as they can stage freedom of protests to ask employers to pay more salaries to them. But for the poor Americans who have no jobs or poor income, they are now suffering from high consumer price. Their low income left them with nothing to pay for rent, foods. and gasoline.

For average American, they need these three daily items as cheap as possible. They will go broke and sooner will have to queue for social money to pay for them. This winter they will suffer from the cold without heat. They will be the ones who will be dying from flu because they have no money to pay for their heat in house. Some may have to go join others under the bridge. For the majority Americans, they can demand more pay from employers to compensate for their consumer price increased.

But for the poor countries, they have no money to buy and soon will become bankrupt because they have no more money to import oil and gas. Hence some countries will go soon forget the sanctions and will go to buy from Russia who will offer cheap gas and oil to them.

India is the backside supporter of US and yet they don't care about their own US pretentious friendship. They have been buying cheaper oil offered by Russia. Loads of oil and gas are now in India to stock up the cheap oil. This goes to show India is double-head snake with one head being friend to Russia and the other head being friend to Russia.

This is because with one of the heads has to eat too. India don't even care to UN or US sanctions on Russia. They need to survive to buy cheaper oil and gas for their electricity to run their households and transports. They even pay Russia in rubles, too, to skirt the sanction.

Eventually, in the next few weeks and months to come, most poor countries will not care any more in following US or comply UN sanctions on Russia. They will ignore them, and will make their own sanctions back at US by opposing sanction on Russia instead.