Answer to Question #312497 in Financial Math for Sikkie

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

In the recent past, various countries including USA and other European countries have imposed sanctions on Russia. In return, Russia has also enacted sanctions towards their counterparts. As a result, the world is experiencing the impact of these sanctions. Oil prices have risen by a huge margin and this sector is accompanied by acute shortage, leading to economic slowdown. For example, the south African economy has been affected adversely. The country imports petroleum and petroleum products and with the present shortage and high oil prices, the country's cost of living is bound to increase. The high oil prices will lead to an increase in cost of the basic items , leading to slow growth in the economy.