Answer to Question #312127 in Macroeconomics for A.vee

Question

The recent global development of Russia invading Ukraine has led to USA and European countries imposing sanctions on Russia. Given that Russia is a major player in OPEC, discuss the implication of this in South African economy.

Answer 1

Rise in oil prices in South Africa. This has led to increasing in the cost of living as well as high transport costs. In fact, South Africa’s automobile association predicts that March will bring record-high fuel prices to that country.

Rising energy costs also affect the production of fertilizer, which is often a necessary input for a productive agricultural sector.

Generally. The sanction has led to an increased cost of living.