--- title: "Russia’s war in Ukraine remains biggest driver of global uncertainty, says IMF" description: "According to the World Uncertainty Index compiled by the International Monetary Fund, Russia’s war in Ukraine remains by far the biggest driver of ‘global uncertainty’, which remains at extremely elevated levels. This hurts economic growth and investment flows, and is a pointed reminder that Pretoria’s foreign policy does not have SA’s best interests in mind." type: "NewsArticle" publisher: "Daily Maverick" site: "https://www.dailymaverick.co.za" section: "WORLD UNCERTAINTY INDEX" author: "Ed Stoddard" author_url: "https://www.dailymaverick.co.za/author/ed-stoddard/" canonical_url: "https://www.dailymaverick.co.za/article/2023-01-30-russias-war-in-ukraine-remains-biggest-driver-of-global-uncertainty-says-imf/" published: "2023-01-30T21:27:43" lang: "en-ZA" word_count: 472 --- # Russia’s war in Ukraine remains biggest driver of global uncertainty, says IMF > According to the World Uncertainty Index compiled by the International Monetary Fund, Russia’s war in Ukraine remains by far the biggest driver of ‘global uncertainty’, which remains at extremely elevated levels. This hurts economic growth and investment flows, and is a pointed reminder that Pretoria’s foreign policy does not have SA’s best interests in mind. By Ed Stoddard · Published 30 January 2023, 23:27 SAST ## Key points - The International Monetary Fund (IMF) recently updated its World Uncertainty Index (WUI) to track monthly trends in global uncertainty. The index shows that the biggest source of uncertainty is Russia’s war in Ukraine, followed by Brexit and the US presidential election. The index is based on an analysis of words published in proximity to mentions of uncertainty. This high level of uncertainty has contributed to slower global economic growth, which is having a negative impact on South Africa's economy as well. Domestic issues such as the power crisis, Transnet’s woes, erratic weather patterns and the threat of social unrest are also adding to South African's uncertain future. As a result, investors are uncertain about South African policy on both domestic and foreign fronts, making it even more difficult for the country to move forward economically. - International Monetary Fund (IMF) recently updated its World Uncertainty Index (WUI) to track trends on a monthly basis - Russia’s war in Ukraine is the biggest source of uncertainty, according to the IMF’s Chart of the Week - South Africa has enough domestic uncertainties to sink a Russian battleship, including power crisis, Transnet’s woes, erratic weather patterns and the threat of social unrest - South African policy on both domestic and foreign fronts is sending uncertain signals to investors ## Content More than one commentator has spoken about our current “age of uncertainty” and there are few things that rattle markets and investors more than groping in the dark without a headlamp to shine at least some light on the path ahead. The International Monetary Fund (IMF) recently updated its innovative World Uncertainty Index (WUI) to track these trends on a monthly instead of quarterly basis. While the index declined in December, it remains at extremely elevated levels. And the biggest source of uncertainty, by a country mile, is Russia’s war in Ukraine, a point driven home by the IMF’s [Chart of the Week](https://www.imf.org/en/Blogs/Articles/2023/01/26/global-economic-uncertainty-remains-elevated-weighing-on-growth). “Uncertainty jumped following the United Kingdom’s unexpected vote to leave the European Union — and soared even further after the surprise outcome of the 2016 presidential election in the United States. This was followed by US trade tensions with China, which caused major uncertainty for the world,” the IMF notes. “Another big spike followed in early 2020 with the onset of the coronavirus pandemic, followed less than two years later by another shock from Russia’s invasion of Ukraine and renewed trade uncertainty associated with the risk of geoeconomic fragmentation.” The index is based on a textual model. Using Economist Intelligence Unit reports, it is derived from an analysis that draws on words published in proximity to mentions of uncertainty. Uncertainty casts a shadow over economic growth and by extension investment flows. It’s a key reason global economic growth is seen as slowing this year. --- **Visit [*Daily Maverick's* home page](https://www.dailymaverick.co.za?utm_source=direct&utm_medium=in_article_link&utm_campaign=homepage) for more news, analysis and investigations** --- South Africa alone has enough domestic uncertainties to sink a Russian battleship. The power crisis, Transnet’s woes, erratic weather patterns and the threat of explosive levels of social unrest all shroud the future in a haze like the clouds of smoke that hang over a service delivery protest. And the words ‘political’ and ‘policy’ are frequently found in proximity to the word ‘uncertainty’ in South African public discourse. Returning to Russia’s vicious invasion of Ukraine, the WUI is also a pointed reminder that Pretoria’s foreign policy hardly has the best interests of South Africa in mind — a clear sign that it is probably only in the interests of certain elements in the ANC. The unfolding cost-of-living crisis in South Africa spurred by surging food and fuel inflation, which triggered a decline last year in real wages, is partly rooted in Russian President Vladimir Putin’s aggression. And slowing global economic growth, another of the war’s casualties, is inflicting significant collateral damage on the South African economy. The country is poorer as a result, and already glaring disparities in wealth and income are almost certainly widening. The only certainty in this mess is that South African policy on the domestic and foreign fronts is going to continue to send uncertain signals to investors. **DM/BM**