HOW UKRAINE VS RUSSIA AFFECTS THE US
In a short period of time, the Russian invasion has taken a toll on the United States economy. The economic repercussions include increased inflation, a rise in fuel prices, uncertainty in the commodity market, etc.
The oil production in Russia went up to 10 million barrels in recent years, which accounts for a rough estimate of 10% of the world’s oil demands. As Russia exports oil and gas to many countries, this invasion has caused a sharp rise in their prices. Not only did the US suffer from the Russian attack in terms of liquid fuel, but Russia is also a significant food supplier.
The toll in the US was because we directly imported from Russia. The US and much of the world market are under the stress of rapid inflation caused by these attacks. The cost of raw material and finished goods has increased, knocking-off sales and profit margins for the US.
Due to the rise in prices, the American purchasing power has decreased, creating hesitation in customers to spend. Thus, a general slowdown has been experienced in the economy, adversely affecting our GDP.
To top it off, the Federal Reserve decided to increase the interest rate in March 2022. The increase in the global fuel price can cause a supply shortage in the world market.
Additionally, the Biden administration is seeking $10 billion in aid for Ukraine from Congress. The administration wants the money and additional funds to fight Covid-19 wrapped into a fiscal 2022 spending bill that Congress aims to pass by next week. While there is worldwide support for Ukraine, Republicans are pushing back at providing additional funds for addressing the coronavirus pandemic.
Unfortunately, the country’s economic fallout hasn’t been measured yet. There are many other conflicts and geopolitical clashes including the pandemic that may have effect the economy later this year. If this happens, there’s a possibility of increasing magnitude on the US economy. In the wake of the pandemic, the world economies have suffered beyond expectation.
Not only has business suffered, but people across the country are experiencing a pessimistic mindset due to their financial situation. This negativity is due to the prevailing uncertainty.
Although Europe has felt more repercussions than the US, we have had our fair share of implications due to the invasion. But the change in prices in one part of the world affects another as there are international influences of economic depression worldwide, and the US is no exception.
