How the Ukraine and Russian war destroy the world financial markets

 This conflict is a major blow to the global economy that will hurt growth and increase inflation in the world. The Russian invasion of Ukraine harms not only the global economy but also kill millions of people who became homeless. The global financial market is also facing a lot of crises because of the war. People face financial crises in daily life because of three reasons first is the higher prices of food and energy gas prices. Second is when two neighboring nations are doing war that will create a grapple in the economy and create disruption in the trade, supply chain, and surge in the refugee flows. The third is the reduced business confidence and high investor uncertainty, which tightens financial conditions and affects capital outflow from the emergency market also.  

Over the six months of the Russia and Ukraine war in what Moscow calls it that it is a special military operation, in this military operation thousands of people kill and millions of people were homeless and the world is facing the worst situation after the cold war. It has also affected the global financial market into much turmoil which is listed below. 

Recession fear 

During the time Russia's invaded Ukraine, that time whole world had fear of economic recession. Many nations face inflation in the prices of energy gas, food, and other essential commodities. This situation is very critical for the household and industry, more than trebled since June alone on fears Russia will cut off its supplies, which will lead to energy ration in some economic. Several nations also face different hurdles because of the conflict. 

However, the European central bank, the bank of England, and other bank are tried to crush inflation effectively and spiraling energy costs are fuelling. On the other hand, the interest rates of bank interest squeeze households and companies also struggling with rising costs. 

The world economy was going down during the war between Ukraine and Russia because the world faced a shortage of fuel. Russia is one of the important sources and exporters of oil in the world. Thus, the demand for fuel is increased and the supply of oil is decreased which would impact the prices of the fuel.  

Growth pain 

This is the second major reason for the rattling of the global economy. The world economy had been going down during the war. The reason is, that both the nation Ukraine and Russia are key export of wheat and corn. Russia's invasion was the reason for broken of the supply chain creating the wheat shortage in several nations. During the Russian invasion, the average price of wheat increased. This impacts the global income and affects the per capita income of the person. 

The second main reason for decreasing growth was an increase in fuel prices. Several nations were highly dependent on Russian oil. The oil shortage affects the world's fuel prices and hit the highest prices of fuel in the world. 

Inflation palpitation 

The surge in energy and food prices, in the combination with the post-pandemic situation, is the reason for inflation. The supply chain was affected during the pandemic period and the little recovery post-covid-19 situation then the war impacted again the supply chain. In recent years, the world faced the highest rate of inflation around the world after 1970. This time rate of interest also impact inflation and the cost of borrowing was high and worries increased for default in the payment. Economies are not able for maintaining liquidity in the financial market. This impacts a lot the growth of the nations.  

Impact on currencies   

This impacted the currencies of the nation the euro is down more than 12 percent so far this year. This thing reflects the view that further cuts in supplies of Russian gas will hit the particularly hard major euro-zero economy that is dependent on it. There are several nations currencies like Germany and Italy also impacted by the Russian invasion. The Indian currency is going down persistently. 

Shortage of gas 

The world faced a gas shortage Russia invaded Ukraine. The prices of gas would increased during the war. There are several sanctions also imposed on the trade with Russia which is the reason for the shortage of gas. Russia is one l of the largest exports of gas in the world. if the nations do not trade with Russia that will impact the national income along with the growth of the business. 

Russian gas flows through the major pipeline to Europe that was cut around 75 since the start of the year leading to accusations by top European politicians. Russia holds 40 percent part of the gas in the world before the invasion. 

Affects the chemical and car parts  

Chemicals and gas are very important in the manufacturing the electric vehicle. There are several chemical companies also suffering from the Russian invasion of Ukraine. The manufacturing of chemicals declined a lot. It will impact the production and prices of the vehicles. Car part makers companies were also hit hard, partly because Russia is a major market for such as VW and Mercedes. It impacts the car market a lot.  

There are several companies stopped the production and shares prices of companies hit hardly recently such European chemical company.

These are major reasons of the financial problems faced by global economy.