• Russia-Ukraine Conflict: What are the Implications for the Global Economy?

    Research Overview

    Following robust economic recovery in 2021, global economic conditions were set to normalize in 2022 amid tightening of global financial conditions, sporadic virus outbreaks, and easing supply disruptions. However, Russia’s invasion of Ukraine in February 2022 has unleashed new-found volatility in global commodity prices – from oil to wheat and exacerbated fragile global supply chains, raising inflationary pressures. Enduring western sanctions on Russia amid a drawn-out conflict coupled with extensive economic destruction in Ukraine stand to undermine global GDP growth in 2022 and potentially in 2023. Against this backdrop, how will the Russia-Ukraine conflict impact GDP growth in key economies? Will the invasion spur a global trade and supply-chain reorientation in 2022 and beyond? How will central banks navigate the economic tradeoff between mounting inflation and weakening growth, impacting firms’ borrowing decisions? What is the outlook for oil and gas prices in 2022?

    This research delves into the GDP growth outlook for select economies based on the evolving policy shifts, trade disruptions, and higher crude oil prices. The report delineates the impact of the conflict on global trade and identifies the winners and losers from potential trade policy reorientation. Another key feature of this research is the inflation and monetary policy outlook with implications for firms’ pricing and borrowing decisions. By analyzing the extent of disruption in key industries, this piece provides insights into the near-term outlook for aviation, automotive, metals, and agriculture sectors.

    Finally, a medium-term view of global policy pivots in response to the crisis is highlighted in the context of securing supply-chain vulnerabilities, mitigation of energy security risks, and trade and investment shifts.


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