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Besides increasing interest rates, the war has generated loss of purchasing power, reduced consumption, and deterioration in working conditions.
On Wednesday, the Italian Central Bank Governor Ignazio Visco said that the Ukrainian conflict has had a sprawling impact on the European economies, pushing the median wealth and consumer confidence lower.
In his annual report, he pointed out that the Ukraine crisis has also had an impact on energy prices, which resulted in an increase in interest rates by the European Central Bank (ECB), all of 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... Amid the clear and widespread increase in inflation... global growth slowed down in a scenario of strong economic and political uncertainty," Visco said.
The European economies were significantly boosted by the European Union's (EU) massive coronavirus recovery package of loans and grants. To date, over than US$160 billion have been distributed to the EU member states.
The most striking chart in @bancaditalia governor's speech Ignazio Visco today: the number of university graduates in #Italy is not only much lower than that of European peers, but it stopped rising in the last few years�� pic.twitter.com/VB0fG6IjIE
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.
Contrary to what Prime Minister Giorgia Meloni thinks, the Central Bank governor expressed the need to structure policies to improve wages and youth employment.
"Temporary work is associated with very long precarious conditions. The proportion of young people who after 5 years continue in limited-term jobs remains close to 20 percent," Visco said.