ეკონომიკური პროფილი (Dec 2022)
THE IMPACT OF THE RUSSIA-UKRAINE WAR ON THE TRADE BALANCE OF THE WORLD AND GEORGIA
Abstract
Just when the whole world, which was already almost stopped and reduced as a result of the pandemic, was starting the process of restoring the global economy, the Russian Federation invaded Ukraine, which further stopped the process of economic recovery and deepened the world economic crisis, which was previously dictated by the breakdown of the supply chains. Russia and Ukraine, with their economic scale, are important players in ensuring the world trade balance, both jointly and separately, so the start of the war led to an increase in the prices of a number of goods and services, which particularly affected strategic goods such as oil products, gas, wheat, corn, oil and others. The increase in the prices of strategic goods was quite large-scale at the world level, so in the most countries of the world the rate of inflation increased, which led to the correction of various macroeconomic indicators, while such corrections turned out to be more sensitive for the countries of the European continent, which depended on Russian energy resources. Although the economic and financial sanctions were quite immediate, some countries still failed to join the sanctions and plans were developed to reduce their dependence on Russian energy resources and goods, because joining the sanctions completely would cause the collapse of the economy of such countries, since some countries are completely dependent on Russian resources. Russia and Ukraine are one of the most important trade and partner countries for Georgia, that's why the war had a significant impact on the economy of Georgia. Despite the fact that Georgia largely joined the sanctions imposed by the European Union, it still maintained its openness to the Russian economy and trade, which was reflected in the Georgian economy by the inflow of remittances from Russia and the increase by the flow of travelers.
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