War in Ukraine Lives and livelihoods, lost and disrupted Report

Web 2022
Ukriane
Exhibit 1 of 23
In our initial framing, duration duration and and scale scale of of disruption and and policy policy response will will
shape the economic outcomes outcomes of of this this crisis. crisis.
Potential scenarios and response
Scenarios discussed in this document
Government policy, consumer
and business response
1 Contained
Disruption contained in duration
and scale, with no escalation in
sanctions; refugee situation and
energy, food, and commodity
markets stabilize
1C
1B
1A
2 Extended
Disruption grows; refugee situation
and sanctions escalate moderately;
energy, food, and commodity
markets adapt and then
stabilize
2C
2B
2A
Duration and
scale of
disruption
3 Severe and escalating
Pronounced disruption in scale
and duration; refugee situation
worsens; sanctions escalate;
energy and commodity markets
severely disrupted
3C
3B
3A
C Restrained
Accelerated pace
of monetary
measures to limit
inflation, lower
long-term global
growth prospects
B Moderate
Exit from current
stimulus policies
continue; decarbonization
goals
reduced; restart
of fossil fuel
investments
A Robust
Exit from current
stimulus policies
slowed; new fiscal
support for energy
and food costs and
for investments in
energy infrastructure
The current context
Across all scenarios, a few facts are immutable. The
harshest effects are being felt in Ukraine. This is
where lives have been lost and thrown into turmoil.
Destruction of property and infrastructure is already
extensive and worsening by the day. The impact of
sanctions on Russia is significant: the ruble has lost
about half of its value since the onset of hostilities,
consumer prices are increasing rapidly, the Russian
central bank has been forced to lift short-term
interest rates to 20 percent, and the Russian stock
market is closed.
Beyond the conflict zone, the invasion of Ukraine
takes place at a fraught moment for the global
economy and livelihoods, particularly the vulnerable.
COVID-19 is receding in many parts of the world
but is not yet gone, and it is still a crisis in many
countries, with some of them struggling with the exit
from public-health interventions. Furthermore, the
possibility of a new and severe virus variant cannot
be discounted. Also, inflation continues to gather
steam in most parts of the world. In some, it has
reached multidecade highs and is driving up the
costs of living for households.
6 War in Ukraine: Lives and livelihoods, lost and disrupted