The War in Ukraine: Global Economy Under Putin’s Invasion

For many of us Russia’s full-scale invasion in Ukraine was hard to believe in, but the war is real and it’s taking lives. While Ukrainian people fearlessly defend their land, the world takes sides and decides on sanctions, which throws markets into a state of turbulence.

We decided to take a closer look at what’s happening in the global economy and try to outline the possible consequences.

What’s happening in Ukraine

On February 24, the next day after its Defender of the Fatherland Day, Russia invaded Ukraine. According to the president of Russia Vladimir Putin, what his country has started is an operation with the aim of “demilitarization and denazification of Ukraine.”

Claiming that its actions are directed on establishing peace, Russia drops vacuum bombs and fires from heavy flamethrowers, the use of which is forbidden by the Geneva Conventions. More than 2,000 civilians have been killed as of March 3 as Russia continues to bombard cities, including residential areas, and hitting universities, kindergartens, and health facilities.

Ukrainian Armed Forces have been fighting back for eight days so far. More than 5,000 Russian soldiers were killed, hundreds surrendered. Civilians go on the streets and stop Russian tanks bare-handed.

How the war might affect the world

A number of Western media has likened Putin’s onslaught to the one of the Nazi Germany. Reuters called the war the largest military invasion that Europe has seen since World War II. Nation leaders globally oppose the intervention. The NATO secretary-general Jens Stoltenberg warned that “peace on our continent has been shattered” and the war puts at risk “countless innocent lives.” His concerns are in step with the reminders that Europe has been neglecting Hitler’s and Stalin’s ambitions for too long, and then it was too late.

What’s in for the global economy and markets?

While Ukraine and Russia, unfortunately, lose the lives of their people, the rest of the world has been shuddering with the economical repercussions. Intense volatility spurred by the war is already at work in the global markets.

With critical Ukrainian pipelines in danger and Russia being one of the biggest energy producers in the world, oil prices surge as the fighting intensifies. The largest Russian oil consumers, fearing sanctions, refuse to buy barrels from Russia. All of it may result in the inflation ramping up globally.

The graphic shows a consistent increase in the pressure on the US inflation (Institute for Economics & Peace)

As negative interest rates, typical for wars, come into play, Barron’s predicts a declining US stock market and high commodity prices for 2022.

It’s always darkest before dawn, but when it comes to the stock market, there is no guarantee to that. Still, historically, stocks have shown a tendency to bounce back quickly after short-time losses. This scenario was true for the Russian invasion of Crimea, Iraq War, Gulf War, and Iraqi invasion of Kuwait.

If there is anything we could dare to call a positive side to war, it’s that military spending can be a huge drive for global technological progress, new industries and jobs emerging. But at what cost. And there’s a big question, what might be left of the world, if it doesn’t act immediately.

Let’s stop the war together

Sign our petition by which we ask global tech giants to block Russians from corporate and personal software licenses and services: https://chng.it/QNYnvMk9Yd.

You can also donate to Ukrainian army by these verified links:

The War in Ukraine: Global Economy Under Putin’s Invasion

What’s happening in Ukraine

How the war might affect the world

What’s in for the global economy and markets?

Let’s stop the war together

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