How Does War Affect the Global Economy?

战争如何影响全球经济 

刘立军 供稿

TRANSCRIPT

Our world is more interconnected than ever. So when conflicts happen, they affect the economies of many other countries. 

Usually, neighboring countries suffer the most. They are the most impacted by geopolitical tensions and refugee flows, which can put a major strain on resources. But countries with strong trade links can also be severely impacted. A contraction in commodity trade would not only raise prices of commodities, but it can put a dent on consumer confidence and purchasing power.

High inflation diminishes real incomes and suppresses demand for goods and services eating into consumer spending. When this happens, financial conditions could tighten as central banks raise interest rates. And if confidence is hit hard, demand could significantly decrease.

Right now, we’re seeing tightening measures go faster and further in some countries. And that is worrisome for countries that are in a tight place to begin with. It will weigh on economic growth and distresses on public finances and potentially even add to risks of social unrest, especially for countries dependent on food and energy imports.

In countries with weak social safety nets and few job opportunities, scarcity and rising prices will hit poor and vulnerable households the hardest. 

Policymakers will have to strike the delicate balance between containing inflation and supporting the economic recovery from the pandemic. This can be especially challenging as volatility in global financial markets reduces business confidence and limits investment. Longer term, this could have implications on the global supply chain system and integrated financial markets.

While the future is still very uncertain, we may see significant changes in the global economic order as the energy trade flows shift, payment systems fragment, and countries rethink their financial dependence on each other.

VOCABULARY

1. impact v.冲击，撞击

2. dent n. a reduction in the amount of something 减少，削减，耗减。例如：The trip made a big dent in our savings. 这次旅行花掉了我们一大笔积蓄。

3. volatility n. 易变性；反复无常

QUESTIONS

Read the statements. Then listen to the news and decide whether the statements are true (T) or false (F). Then correct the false statements.

1. Our world is less interconnected than ever.

2. When conflicts happen, they affect the economies of all countries.

3. Neighboring countries usually suffer the most, and they are the most impacted by geopolitical tensions and refugee flows.

4. Countries with weak trade links can be severely impacted.

5. A contraction in commodity trade would decrease prices of commodities.

6. High inflation diminishes real incomes and suppresses demand for goods and services eating into consumer spending.

7. War will add to risks of social unrest, especially for countries dependent on food and energy exports.

8. In countries with weak social safety nets and more job opportunities, scarcity and rising prices will hit poor and vulnerable households the hardest.

9. Policymakers will have to strike the delicate balance between containing inflation and supporting the economic recovery from the pandemic. 

KEY 

Read the statements. Then listen to the news and decide whether the statements are true (T) or false (F). Then correct the false statements.(F) 

1. Our world is less interconnected than ever.（正确表达）Our world is more interconnected than ever.

(F) 2. When conflicts happen, they affect the economies of all countries.（正确表达）When conflicts happen, they affect the economies of many other countries.

(T) 3. Neighboring countries usually suffer the most, and they are the most impacted by geopolitical tensions and refugee flows.

(F) 4. Countries with weak trade links can be severely impacted.（正确表达）Countries with strong trade links can be severely impacted.

(F) 5. A contraction in commodity trade would decrease prices of commodities.（正确表达）A contraction in commodity trade would raise prices of commodities.

(T) 6. High inflation diminishes real incomes and suppresses demand for goods and services eating into consumer spending.

(F) 7. War will add to risks of social unrest, especially for countries dependent on food and energy exports.（正确表达）War will add to risks of social unrest, especially for countries dependent on food and energy imports.

(F) 8. In countries with weak social safety nets and more job opportunities, scarcity and rising prices will hit poor and vulnerable households the hardest.（正确表达）In countries with weak social safety nets and few job opportunities, scarcity and rising prices will hit poor and vulnerable households the hardest.

(T) 9. Policymakers will have to strike the delicate balance between containing inflation and supporting the economic recovery from the pandemic. 

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