Economic vulnerability to the RussiaUkraine War: which low- and middle-income countries are most vulnerable?

The global economy is still recovering – modestly – from the pandemic and is now facing significant uncertainty over the ongoing Russia–Ukraine war. It is too early to tell the magnitude of the impacts, which will depend on the duration and the escalation of the war and on the corresponding regional and global responses (e.g. economic sanctions) against Russia. Estimates suggest that the ongoing war will reduce global output by 0.4 percentage point to 1 percentage point (pp) in 2022 (Juanino and Millard, 2022; OECD 2022; Peterson et al, 2022). This will amount to global costs between $380 billion and$950 billion in 2022.Global shocks can derail the growth and economic transformation trajectories of low- and middle-income countries (L&MICs). While this war is isolated to Russian and Ukraine territories, its impacts on L&MICs will be felt through various channels, such as disruptions in trade and upward pressure in global prices of products (e.g. oil, metals, wheat) of which Russia and/or Ukraine are major global suppliers. For instance, Brent crude oil prices went up by 11% between 25 February 2022 and 1 April 2022, while wheat prices increased by 30% during the same period. Such increase would occur in a context of already rising commodity prices. Global price indices increased for food (11%) and metals and minerals (12%) between December 2021 and February 2022 (World Bank, 2022).This paper quantifies the economic vulnerabilities of 118 L&MICs to the economic effects of the Russia–Ukraine war through different impact channels. In this paper, economic vulnerability to the war at country level is measured as the combination of direct economic exposure to Russia and Ukraine (e.g. through bilateral trade and investment, migrants) and indirect exposure to the global effects of the war (e.g. through levels of commodity imports, trade and investment openness, tourism), minus resilience (e.g. quality of economic governance, capacity for energy transition, food security) to manage the negative impact of shocks that may emerge from the war