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At France 24 we review the milestones that this year marked in economic matters in the world: energy crisis, inflation, interest rates and the thorny business dispute between the richest man in the world and one of the most popular social networks.
If 2021 was considered by many as the year of post-pandemic economic recovery, 2022 was called to make it happen. Until the war in Ukraine came.
The Omicron variant of Covid-19 was the main threat to the world economy, with some countries imposing mobility restrictions, as reported in January by the International Monetary Fund, which in turn warned of interruptions in the supply chain that came from the pandemic.
But the outbreak of the war in Ukraine in February 2022 changed the picture: world growth expected in January of 4.4%, the most recent IMF forecast speaks of 3.2% and inflation not seen in decades. But how did it get to this point?
The war in Ukraine and the energy crisis
Russia is at the top of the world’s largest oil exporters along with Saudi Arabia. With the invasion of the Ukraine, its Western rivals rushed to find new sources of supply at the cost of much higher prices.
The war in Ukraine reshaped Europe’s energy supply. Before the conflict, 75% of Russian gas exports and 55% of oil went to these countries. Ten months later, the Kremlin is looking for new clients and Brussels for new suppliers.
The economist Daniel Lacalle explained that “the big winners of the war in Ukraine are clearly the United States, Qatar, Dubai, mainly the big suppliers of liquefied natural gas (…) and the big losers have been the countries of the European Union”.
In the midst of the worst energy crisis in decades, with little gas supplies for the winter, Europe imposed a price cap on the purchase price of Russian oil, while Moscow limited shipments to the old continent to almost zero.
Analysts calculate that the crisis will last for years and that the energy situation will cost Europe several points of the Gross Domestic Product.
The war also dealt a blow to food security, as Russia and Ukraine are two agricultural superpowers responsible for 30% of world wheat trade and 78% of sunflower oil exports.
After the war, the global food import bill would rise to 1.94 trillion dollars, an increase of 10% compared to 2021, due to the increase in prices, according to estimates by the United Nations Organization for Agriculture and Food. Feeding.
The food price index reached a record high after the start of the invasion, but managed to stabilize in recent months, according to data from the UN agency.
“The biggest losers from the invasion of Ukraine in terms of supply and price are above all the North African countries that depend on Ukraine for up to 80%. Also those who have a large part of their GDP in agriculture, who need this grain, such as those in Latin America,” added Lacalle.
The pressure on prices has affected not only Europe, but the rest of the world. And Latin America is no exception: in Brazil, Chile, Colombia, Mexico and Peru, the price index has been rising at a double-digit rate, a maximum not recorded in two decades.
According to the IMF, the rapid response of the region’s monetary authorities – which raised interest rates much sooner than in other economies – “helped contain price pressures.”
The agency expects prices to remain high for a long time, while high interest rates have put pressure on local currencies, which have devalued against the dollar, considered the most desirable safe-haven asset in times of turbulence.
Twitter: the business dispute of the year
2022 did not escape business troubles and the one starring the richest man in the world and one of the most popular social networks captured all the attention.
After half a year of legal back and forth, Tesla owner Elon Musk has acquired Twitter for $44 billion. His first action as the new owner was the dismissal of his board of directors at the end of October, followed by the cancellation of the contracts of at least half of his staff, some 3,700 people.
Meanwhile, one of his most controversial announcements so far has been the launch of the $8-a-month subscription service for those who want to be verified on the social network, a proposition that has suffered all sorts of setbacks.
2022 was a year to be forgotten for technology companies, which in the previous two years had made the most of the pandemic and which this year had to massively cut their workforce and lost millions of users.
