Consequences of the conflict in Ukraine on the world economy

Abstract

Since the beginning of the Russian military operation in Ukraine, the expert public has been asking an important question: what are the possible economic consequences of this important world event and what could be the response of countries that call themselves the "international community" and are in fact Western countries? Th is paper will give a general picture of the consequences that occurred on world markets in the first two months of the Ukrainian crisis. Among other things, the paper will present a debate of American and English experts organized by the IGM Forum, Chicago Booth, in which relevant opinions on this issue are presented. The conflict between Russia and Ukraine has brought unprecedented turbulence to the global economy, which will have deep and long-term consequences. In addition to market disturbances caused by the conflict itself, there are disturbances caused by political decisions: sanctions by Western European countries and the United States against Russia, as well as countermeasures by the Russian state, which is trying to protect itself from sanctions. In the monetary and financial sphere, there are changes in the banks' operations, and Russia is trying to present the ruble on the world currency market as a means of payment in international trade and insisting on paying for its energy exclusively in Russian rubles. The consequences of this conflict are noticeable aft er only two months: an unprecedented rise in inflation, primarily in Europe and America, but also in the rest of the world, then a big increase in food prices (especially cereals and edible oil), shortages of food in supermarkets, and the biggest blow is the energy crisis, which is reflected in the enormous increase in energy prices (oil and gas), which is the locomotive of rising inflation in countries forced to buy energy at too high a market price. With the end of the Ukrainian crisis, great changes can be expected on the world market, and even changes in some previous economic paradigms.