The cost-of-living crisis is having a global impact. Here’s what countries are doing to help

This article was first published in July 2022 and updated in September 2022.

The economic impacts of the Russian invasion of Ukraine are rippling out across the globe in a cost of living crisis that’s pushing millions more people into poverty.

Soaring food and energy prices have resulted in 71 million people in developing countries falling into poverty, according to the UN Development Programme (UNDP).

“Unprecedented price surges mean that for many people across the world, the food that they could afford yesterday is no longer attainable today,” says UNDP Administrator, Achim Steiner.

While supply-chain disruptions from the COVID-19 pandemic had already pushed up prices, inflation is rising due to further disruptions caused by the war in Ukraine.

Most of the 166.8% cost increase in natural gas over the 12 months to May 2022 has been recorded since the war began in February. Russia’s war in Ukraine is also responsible for almost 40% of the annual price increase of wheat and for 60-75% of the annual price increases of corn and sunflower seed oil, according to UNDP.

The countries facing the worst effects of the crisis across all poverty lines, according to UNDP, are Armenia and Uzbekistan in Central Asia; Burkina Faso, Ghana, Kenya, Rwanda, and Sudan in sub-Saharan Africa; Haiti in Latin America; and Pakistan and Sri Lanka in South Asia.

But even in the most developed countries, people are going without food. In May, an Ipsos poll for the World Economic Forum found that 1 in 4 people were struggling financially in 11 developed countries. In the UK, as many as 1 in 7 adults now say they can’t afford to eat every day - an increase of 57% since January.

The poorest families are the most affected by price rises because food and energy bills make up a bigger proportion of their monthly outgoings - in some cases, twice as much.

Reuters has been reporting on the impacts of the cost of living crisis in 18 countries around the globe in its three-part 'Inflation Diaries' series. Here are some of the ways inflation is affecting people’s daily lives:

Governments are bringing in measures designed to ease the impact of inflation, including tax cuts, free train travel, energy subsidies and cash transfers.

However, the UNDP report warns that not all policies will be equally effective and some may disproportionately benefit wealthier people.

“While blanket energy subsidies may help in the short term, in the longer term they drive inequality, further exacerbate the climate crisis, and do not soften the immediate blow of the cost of lliving increase as much as targeted cash transfers do,” says report author George Gray Molina, UNDP Head of Strategic Policy Engagement. “They offer some relief as an immediate band-aid, but risk causing worse injury over time.”

Here are a few ways countries are supporting people: