Moody's Warned That War Could Cause Inflation To Rise

International credit rating agency Moody's evaluated the economic consequences of the Russia-Ukraine War. The organization said that the war could lead to high inflation for a long time and stated that inflation could exacerbate social tensions.

Moody's warned that war could cause inflation to rise. The economic consequences of the inability to reach a compromise in the war that started with Russia's attack on Ukrainian territory on February 24 began to worsen. International credit rating agency Moody's reported that the Russia-Ukraine war increased the risks of countries arising from high inflation. A longer period of high inflation could exacerbate social tensions and increase pressures on governments to spend to lessen the impact of higher prices, Moody's said in a statement. In the statement, it was stated that the Russia-Ukraine war increased the potential risks, and the effects of the current situation on the credit quality of the countries may vary depending on the debt burden, solvency, institutional strength and political risks. Making a statement on the subject, Samar Maziad, Moody's Vice President and Senior Analyst, said: “The Russian-Ukrainian military conflict could lead to prolonged very high energy prices. Food and fuel prices soar, supply chain disruptions persist. The risks have escalated to higher inflation for a longer period of time. Continued high inflation, particularly slowing real GDP growth and Rising real interest rates will have negative credit effects for countries.”