ISLAMABAD: The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) has identified Pakistan as one of the countries which are relatively more vulnerable to the economic impact of the war in Ukraine in its latest policy brief.

The war began in February after Russian President Vladimir Putin ordered his armed forces to invade the neighboring country. While his decision led to political condemnations by many nations, the economic cost of the war also became a subject of discuss across the world.

The ESCAP document, which was shared online on Sunday, maintains the whole Asia-Pacific region has been affected by the conflict which has led to higher commodity prices, weaker global demand and heightened economic uncertainty.

“Several Asia-Pacific economies, many of which are classified as countries in special situations, are deemed more exposed to the war in Ukraine than others,” the policy brief said while listing down names of several countries including Pakistan and Sri Lanka.

It said these states “could be harder hit because their economic structure and conditions are more exposed to higher energy and food prices, smaller external financial inflows, rising financing costs and/or a sudden shift in business sentiments.”

Pakistan is already witnessing a major financial crisis, with a yawning current account deficit, dwindling foreign exchange reserves and rapidly depreciating national currency.

Discussing the effects of higher global commodity prices, the document said it was leading to rising inflation rates among several Asia-Pacific economies.

“In the Republic of Korea, inflation rose to a near decade-high level,” it continued. “Similarly, inflation rate in Pakistan edged up to 13.4 percent in April 2022, which is more than double the central bank’s inflation target. In addition to weighing down overall household consumption, rising food and energy prices will disproportionately affect poorer households.”

The policy brief added that Pakistan, along with Cambodia, Solomon Islands and Vanuatu, had become more exposed to rising energy prices than other regional countries.

Pakistan and Sri Lanka were also identified as two countries where the external debt stock and debt services ratios had exceeded the threshold values.

The document pointed out the war in Ukraine had resulted in yet another major shock to the world economy, merely two years after the COVID-19 outbreak was declared as a global pandemic.