UK
Russia's invasion of Ukraine has been having a significant impact on global oil and gas prices, with UK gas costs now almost triple what they were at the start of February. Those costs will be passed on to consumers in the months to come. According to research from property firms such as Rightmove, expats and locals are facing an extra £1,000 for 2022 rent and bills. This situation affects even more expats as some are paid in devalued currencies or are just settling down in the host country.
Asafe Kerven, a Brazilian expat living in London for years now, comments that the prices are pretty high, but there are ways to organize yourself. “I live in a hostel, but expatriates should be aware that the key is accommodation, the ones who plan ahead and find a good location with a price that they can afford will be okay.” Other than that, he mentions that transportation is the second biggest expense in the UK, especially if expats have cars, as oil and petrol prices are rising. “Expats can ride a bike, that will make their lives simpler, depending on the weather, of course”, he advises.
A recent study from the Resolution Foundation has estimated that the UK is facing the steepest drop in real-term income for 50 years in spring, with families having an average of £1,000 worse off per year. British ministers will increase national insurance payments by 1.25 per cent starting next month, dubbed a health and social care levy by Boris Johnson. Inflation is predicted to soar beyond 7 per cent in April in the UK, the same month that increases to national insurance and council tax will also hit households.
Spain
The sanctions imposed by most countries on Russia for invading Ukraine, such as the one announced by the United States to renounce importing Russian fuel, have caused a rise in fuel prices worldwide. In Spain, on March 10, diesel, commonly sold at 1.79 euros, exceeded two euros per litter.
This rising inflation rate comes alongside massive increases in energy costs, with the energy price cap also ending in April. Spain has also increased its average price of electricity at the end of February to 240.13 euros/MWh (0.24013 euros/kWh). That represents an increase of 35 euros compared to the price of electricity one week before: 205.6 euros.
US
In the US, the Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI), the most widely used measure of inflation, rose 0.8% in February, up 7.9% over the last twelve months. A large component of the increase in inflation was the cost of energy in the country, which had already begun to go up in the weeks preceding the current war in Ukraine. The most impacted products by the escalation of inflation in the US are used vehicles (40.5%), gas (40%), hotels (23.6%), furniture and bedding (17%), meats, poultry, fish, and eggs (12.2%) and new vehicles (12.2%).
Latin America
The prices of all those raw materials of which Russia and Ukraine are important producers have skyrocketed, in particular oil and gas, but also various metals: aluminium, nickel, copper, iron, neon, titanium, palladium, etc.; some food products: wheat, sunflower oil, corn and also fertilizers. All citizens from Latin American importing countries of these inputs will be strongly affected.
Brazil
In Brazil, the war in Ukraine can lead to a fall in purchasing power and an increase in the cost of living. There was a rise in inflation back in February, even before the mega readjustment in fuels due to the war. Now, the Broad Consumer Price Index (IPCA) projections this year reinforce an increase in interest rates and inflation that will impact consumers directly. Effects of war could take a kilo of bread to R$20 in Brazil, warns economists; usually, it oscillates between R$9 to R$12.
Russia is the world's largest wheat exporter and has been economically affected by the conflict with Ukraine, explains the Brazilian Association of Cookies, Pasta and Industrialized Bread and Cake Industries. As a result, consumers perceive an increase of approximately 20% to 25% in the price of bread in bakeries and supermarkets.
Cuba, Venezuela, and Nicaragua
The new sanctions imposed on Moscow and the closure of airspace throughout the North Atlantic to Russian planes will also impact, in particular, the tourist economy of the Caribbean, in particular Cuba and the Dominican Republic. For both countries, Russia was, in 2021, respectively, the first and second issuer of tourists. The war in Ukraine could cost them this year some 500,000 visitors and billions of dollars and lead to an inflation rise that can increase the cost of living.
Venezuela's case can be even worse, as it is still experiencing inflation on an annual basis; the country ended 2021 with inflation at 686.4%.
