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Ukraine crisis has far-reaching negative economic impact: Italy's central bank head
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People ride scooters past the building of the Bank of Italy in Rome, Italy, May 1, 2022. /Xinhua
People ride scooters past the building of the Bank of Italy in Rome, Italy, May 1, 2022. /Xinhua

People ride scooters past the building of the Bank of Italy in Rome, Italy, May 1, 2022. /Xinhua

The Bank of Italy on Wednesday said the ongoing conflict between Russia and Ukraine has had a sprawling impact on the economic health of Italy and Europe in general, pushing the overall median wealth and consumer confidence lower.

In its annual economic assessment of the previous year, the central bank's governor, Ignazio Visco, said the Ukraine crisis has also affected energy prices, resulting in the European Central Bank increasing interest rates, which had a far-reaching negative economic impact.

The Ukraine conflict "was a turning point in international relations that heavily affected growth, inflation and world trade. Tensions between countries have reached levels not seen since the Cold War," Visco wrote in the report. "Amid the clear and widespread increase in inflation, ... global growth slowed down in a scenario of strong economic and political uncertainty."

Empty shelves for cheap eggs are seen at a supermarket in Brussels, Belgium, October 31, 2022. /Xinhua
Empty shelves for cheap eggs are seen at a supermarket in Brussels, Belgium, October 31, 2022. /Xinhua

Empty shelves for cheap eggs are seen at a supermarket in Brussels, Belgium, October 31, 2022. /Xinhua

The report pointed out that "tensions have also affected exports of agricultural products and fertilizers, jeopardizing the food security of the poorest and most vulnerable economies."

"In many low-income countries, the worsening trade balance, combined with lower net capital inflows, has exacerbated the problems in public finance management, requiring debt restructuring negotiations to begin in several cases," it noted.

The report also said the economies of Italy and other European countries were significantly boosted by the European Union's (EU) massive coronavirus recovery package of loans and grants, with more than 150 billion euros ($160 billion) distributed to the EU member states to date.

It also said that while the disposable income of Italy's households grew by 6.2 percent last year, that was a 1.2 percent decrease in real terms due to the record-setting inflation sparked mainly by the situation in Ukraine.

(With input from Xinhua)

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