The developments in Ukraine over the past week, and the sanctions imposed on Russia as a result, have had a significant impact on financial markets and increased the risks and uncertainties facing the global economy. Policymaking has become even more challenging in a fluid environment as some of the consequences of the economic sanctions imposed on Russia are still unclear.
In the near term, inflation risks have increased significantly. Russia and Ukraine are major exporters of food and industrial commodities, exports of which have been disrupted by the war and the sanctions on Russia. Russia also accounts for about 11-13 per cent of the world’s oil exports and around 25 per cent of natural gas exports.
While energy is excluded from the sanctions for the time being, demand for Russian oil exports has declined as buyers and financial institutions are wary about transacting with the country.
Consequently, oil prices have surged almost 45 per cent since the start of this year, to over $110 per barrel, while wheat prices have jumped more than 60 per cent since mid-February.
Conventionally, central banks would look through one-off spikes in food and energy prices and focus instead on core inflation. However, with inflation in the US and Europe already at multi-decade highs, and core inflation also running above the 2 per cent targets, the surge in commodity prices has increased pressure on central banks to tighten monetary policy even more aggressively.
Despite this pressure, markets are pricing a slower pace of rate hikes from the US Federal Reserve and the European Central Bank this year than they were before Russia’s military offensive in Ukraine, and officials from both the Fed and the ECB have signalled caution.
In his semi-annual testimony before Congress last week, Fed Chair Jerome Powell acknowledged both the increased inflation risk and the strength of the US economy but said he would propose and support a 25 basis point rate hike in March rather than the 50 basis point increase that some of this colleagues in the Federal Open Market Committee (FOMC) have recently called for.
He was perhaps more specific in his comments than he had been previously as he sought to “avoid adding uncertainty to what is already an extraordinarily challenging and uncertain moment”. However, he did leave the door open to more aggressive tightening if inflation comes in higher or remains higher for longer than the Fed currently expects.
One of the uncertainties facing the Fed is that high oil prices usually weaken consumer demand and lead to slower economic growth. As consumers must spend more money on fuel, there is less to spend on other goods and services.
To the extent that oil prices remain high for an extended period, it could mean the Fed wouldn’t need to tighten monetary policy as much to dampen demand. At this stage however, Emirates NBD expects the Fed to raise rates both in March and May as it prioritises its price stability mandate in the face of surging food and energy prices, and strong wage growth.
Europe is likely to see a bigger impact from the disruptions to trade and the impact of sanctions on Russia on its own economy. When the ECB meets this week, it is likely to revise its growth forecasts lower and inflation forecasts substantially higher.
However, policymakers have emphasised caution given the heightened uncertainty and low visibility in terms of economic outcomes. Moreover, the eurozone countries have committed to increasing defence spending and will need to provide additional support for refugees as well, which would likely mean increased debt issuance. This may require further support from the ECB in the form of asset purchases this year even as it seeks to normalise monetary policy to tackle inflation.
Khatija Haque is chief economist and head of research at Emirates NBD
UAE currency: the story behind the money in your pockets
MATCH INFO
Juventus 1 (Dybala 45')
Lazio 3 (Alberto 16', Lulic 73', Cataldi 90 4')
Red card: Rodrigo Bentancur (Juventus)
UAE%20Warriors%20fight%20card
%3Cp%3EMain%20Event%0D%3A%20Catchweight%20165lb%0D%3Cbr%3EMartun%20Mezhulmyan%20(ARM)%20v%20Acoidan%20Duque%20(ESP)%0D%3Cbr%3ECo-Main%20Event%0D%3A%20Bantamweight%0D%3Cbr%3EFelipe%20Pereira%20(BRA)%20v%20Azamat%20Kerefov%20(RUS)%0D%3Cbr%3EMiddleweight%0D%3Cbr%3EMohamad%20Osseili%20(LEB)%20v%20Amir%20Fazli%20(IRN)%0D%3Cbr%3ECatchweight%20161%20lb%0D%3Cbr%3EZhu%20Rong%20(CHI)%20vs.%20Felipe%20Maia%20(BRA)%0D%3Cbr%3ECatchweight%20176%20lb%0D%3Cbr%3EHandesson%20Ferreira%20(BRA)%20vs.%20Ion%20Surdu%20(MDA)%0D%3Cbr%3ECatchweight%20168%20lb%0D%3Cbr%3EArtur%20Zaynukov%20(RUS)%20v%20Sargis%20Vardanyan%20(ARM)%0D%3Cbr%3EFeatherweight%0D%3Cbr%3EIlkhom%20Nazimov%20(UZB)%20v%20Khazar%20Rustamov%20(AZE)%0D%3Cbr%3EBantamweight%0D%3Cbr%3EJalal%20Al%20Daaja%20(JOR)%20v%20Mark%20Alcoba%20(PHI)%0D%3Cbr%3ELightweight%0D%3Cbr%3EJakhongir%20Jumaev%20(UZB)%20v%20Dylan%20Salvador%20(FRA)%0D%3Cbr%3ECatchweight%20143%20lb%0D%3Cbr%3EHikaru%20Yoshino%20(JPN)%20v%20Djamal%20Rustem%20(TUR)%0D%3Cbr%3EFeatherweight%0D%3Cbr%3EJavohir%20Imamov%20(UZB)%20v%20Ulan%20Tamgabaev%20(KAZ)%0D%3Cbr%3ECatchweight%20120%20lb%0D%3Cbr%3ELarissa%20Carvalho%20(BRA)%20v%20Elin%20Oberg%20(SWE)%0D%3Cbr%3ELightweight%0D%3Cbr%3EHussein%20Salem%20(IRQ)%20v%20Arlan%20Faurillo%20(PHI)%3C%2Fp%3E%0A
Results:
Men's wheelchair 800m T34: 1. Walid Ktila (TUN) 1.44.79; 2. Mohammed Al Hammadi (UAE) 1.45.88; 3. Isaac Towers (GBR) 1.46.46.
TALE OF THE TAPE
Floyd Mayweather
- Height
- Weight
- Reach
- Record
Conor McGregor
- Height
- Weight
- Reach
- Record
Russia's Muslim Heartlands
Dominic Rubin, Oxford
Wenger's Arsenal reign in numbers
1,228 - games at the helm, ahead of Sunday's Premier League fixture against West Ham United.
704 - wins to date as Arsenal manager.
3 - Premier League title wins, the last during an unbeaten Invincibles campaign of 2003/04.
1,549 - goals scored in Premier League matches by Wenger's teams.
10 - major trophies won.
473 - Premier League victories.
7 - FA Cup triumphs, with three of those having come the last four seasons.
151 - Premier League losses.
21 - full seasons in charge.
49 - games unbeaten in the Premier League from May 2003 to October 2004.
BRAZIL SQUAD
Alisson (Liverpool), Daniel Fuzato (Roma), Ederson (Man City); Alex Sandro (Juventus), Danilo (Juventus), Eder Militao (Real Madrid), Emerson (Real Betis), Felipe (Atletico Madrid), Marquinhos (PSG), Renan Lodi (Atletico Madrid), Thiago Silva (PSG); Arthur (Barcelona), Casemiro (Real Madrid), Douglas Luiz (Aston Villa), Fabinho (Liverpool), Lucas Paqueta (AC Milan), Philippe Coutinho (Bayern Munich); David Neres (Ajax), Gabriel Jesus (Man City), Richarlison (Everton), Roberto Firmino (Liverpool), Rodrygo (Real Madrid), Willian (Chelsea).
EXPATS
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Lulu%20Wang%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStars%3A%3C%2Fstrong%3E%20Nicole%20Kidman%2C%20Sarayu%20Blue%2C%20Ji-young%20Yoo%2C%20Brian%20Tee%2C%20Jack%20Huston%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%204%2F5%3C%2Fp%3E%0A
The%20specs%3A%202024%20Mercedes%20E200
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E2.0-litre%20four-cyl%20turbo%20%2B%20mild%20hybrid%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E204hp%20at%205%2C800rpm%20%2B23hp%20hybrid%20boost%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E320Nm%20at%201%2C800rpm%20%2B205Nm%20hybrid%20boost%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3E9-speed%20auto%0D%3Cbr%3E%3Cstrong%3EFuel%20consumption%3A%20%3C%2Fstrong%3E7.3L%2F100km%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3ENovember%2FDecember%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh205%2C000%20(estimate)%3C%2Fp%3E%0A
The specs: 2018 Maserati Levante S
Price, base / as tested: Dh409,000 / Dh467,000
Engine: 3.0-litre V6
Transmission: Eight-speed automatic
Power: 430hp @ 5,750rpm
Torque: 580Nm @ 4,500rpm
Fuel economy, combined: 10.9L / 100km
Zayed Sustainability Prize
Mohammed bin Zayed Majlis
More from UAE Human Development Report:
RESULTS
Cagliari 5-2 Fiorentina
Udinese 0-0 SPAL
Sampdoria 0-0 Atalanta
Lazio 4-2 Lecce
Parma 2-0 Roma
Juventus 1-0 AC Milan
Killing of Qassem Suleimani
The Bio
Favourite vegetable: “I really like the taste of the beetroot, the potatoes and the eggplant we are producing.”
Holiday destination: “I like Paris very much, it’s a city very close to my heart.”
Book: “Das Kapital, by Karl Marx. I am not a communist, but there are a lot of lessons for the capitalist system, if you let it get out of control, and humanity.”
Musician: “I like very much Fairuz, the Lebanese singer, and the other is Umm Kulthum. Fairuz is for listening to in the morning, Umm Kulthum for the night.”
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
Honeymoonish
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Elie%20El%20Samaan%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%20%3C%2Fstrong%3ENour%20Al%20Ghandour%2C%20Mahmoud%20Boushahri%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%203%2F5%3C%2Fp%3E%0A
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3EName%3A%20%3C%2Fstrong%3ETelr%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EDubai%2C%20UAE%3Cbr%3E%3Cstrong%3ELaunch%20year%3A%3C%2Fstrong%3E%202014%3Cbr%3E%3Cstrong%3ENumber%20of%20employees%3A%20%3C%2Fstrong%3E65%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3EFinTech%20and%20payments%3Cbr%3E%3Cstrong%3EFunding%3A%20%3C%2Fstrong%3Enearly%20%2430%20million%20so%20far%3C%2Fp%3E%0A
Veil (Object Lessons)
Rafia Zakaria
Bloomsbury Academic
Results
2pm: Handicap Dh 90,000 1,800m; Winner: Majestic Thunder, Tadhg O’Shea (jockey), Satish Seemar (trainer).
2.30pm: Handicap Dh120,000 1,950m; Winner: Just A Penny, Sam Hitchcott, Doug Watson.
3pm: Handicap Dh105,000 1,600m; Winner: Native Appeal, Pat Dobbs, Doug Watson.
3.30pm: Jebel Ali Classic Conditions Dh300,000 1,400m; Winner: Thegreatcollection, Adrie de Vries, Doug Watson.
4pm: Maiden Dh75,000 1,600m; Winner: Oktalgano, Xavier Ziani, Salem bin Ghadayer.
4.30pm: Conditions Dh250,000 1,400m; Winner: Madame Ellingtina, Richard Mullen, Satish Seemar.
5pm: Maiden Dh75,000 1,600m; Winner: Mystery Land, Fabrice Veron, Helal Al Alawi.
5.30pm: Handicap Dh85,000 1,000m; Winner: Shanaghai City, Jesus Rosales, Rashed Bouresly.
Other acts on the Jazz Garden bill
Sharrie Williams
The American singer is hugely respected in blues circles due to her passionate vocals and songwriting. Born and raised in Michigan, Williams began recording and touring as a teenage gospel singer. Her career took off with the blues band The Wiseguys. Such was the acclaim of their live shows that they toured throughout Europe and in Africa. As a solo artist, Williams has also collaborated with the likes of the late Dizzy Gillespie, Van Morrison and Mavis Staples.
Lin Rountree
An accomplished smooth jazz artist who blends his chilled approach with R‘n’B. Trained at the Duke Ellington School of the Arts in Washington, DC, Rountree formed his own band in 2004. He has also recorded with the likes of Kem, Dwele and Conya Doss. He comes to Dubai on the back of his new single Pass The Groove, from his forthcoming 2018 album Stronger Still, which may follow his five previous solo albums in cracking the top 10 of the US jazz charts.
Anita Williams
Dubai-based singer Anita Williams will open the night with a set of covers and swing, jazz and blues standards that made her an in-demand singer across the emirate. The Irish singer has been performing in Dubai since 2008 at venues such as MusicHall and Voda Bar. Her Jazz Garden appearance is career highlight as she will use the event to perform the original song Big Blue Eyes, the single from her debut solo album, due for release soon.
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Batti Gul Meter Chalu
Producers: KRTI Productions, T-Series
Director: Sree Narayan Singh
Cast: Shahid Kapoor, Shraddha Kapoor, Divyenndu Sharma, Yami Gautam
Rating: 2/5
UAE'S%20YOUNG%20GUNS
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