This study
analyses the impact of global commodity price shocks associated with the
Russia-Ukraine war on the Bangladesh economy. Using an economy-wide model of
Bangladesh, we find that the global price shocks decrease Bangladesh's GDP by
0.3 per cent, driving an additional 4.7 million and 3.8 million people into
poverty and hunger, respectively. A hypothetical increase in subsidy and cash transfer
programs could be very beneficial to the vulnerable groups, reducing the
poverty increase by about half. An alternative policy of price subsidies is
superior to cash transfers in stimulating consumption demand. Still, the
targeted cash transfer program is more effective in helping vulnerable groups
and reducing negative impacts on development outcomes.
Keywords
Russia-Ukraine War,
Income and Food Price Subsidies, Global Price Shocks, Computable General
Equilibrium (CGE) model.
JEL
Classification Code
C68, F47,
O13
Recommended
Citation
Chowdhury, T. T., Dorosh, P. A., Islam, R., & Pradesha, A. (2022). Impacts of the Russia-Ukraine war price shocks on the Bangladesh economy: Policy responses and development outcomes. The Bangladesh Development Studies, 45(3/4), 73-97.
