Understanding the Economic Impact of Russia’s War in Ukraine

Our team of experts and Kroll Institute fellows have been monitoring Russia’s war on Ukraine and are sharing insights around risks and the economic impacts associated with it. In the article, “How Conflicts Impact Economies: Understanding the Situation with Russia and Ukraine,” our experts discuss the long- and short-term impacts as well as a variety of sectors that are affected, including:

Energy: Expect that continued price rises and remedial measures will strain other parts of the global economy, especially sea-based transportation. The “felt” impact of fuel will likely drag on consumption, even in the U.S., which is a net energy exporter.

Other commodities: The automotive industry will suffer, as will industries relying on semiconductors and batteries. Global food production could also be impacted.

More risks for chipmakers and advanced technology firms: The most significant U.S. export controls will add risk to companies dealing in advanced technologies that involve U.S. inputs.

Financial services: Limited Russian access to SWIFT will persist but Russia’s financial services will be paralyzed and cryptocurrencies will likely become riskier, requiring increased due diligence by counterparties to crypto transactions. Expect a highly dynamic enforcement environment, with western countries taking additional steps as they observe the Russian Central Bank’s activities.

Defense Spending: As one would expect, war tends to drive defense spending up. Domestic political support for Ukraine throughout the West may overcome a post-Iraq and Afghanistan desire to reduce spending, particularly in Europe.

To explore these areas further, read the full article, “How Conflicts Impact Economies: Understanding the Situation with Russia and Ukraine.”