Russia and Ukraine war could be a threat to global market crisis

The coronavirus pandemic started in December 2019 and caused a global economic crisis for nearly two years since then. Now it is the time when the economy across the world is recovering and is getting back on track. As the recovery continues, the recent invasion of Russia on Ukraine has thrown a fresh threat to the financial markets. The recent conflict could prove to be one of the biggest since the World War and has threatened the hopes of a strong global economic recovery. The conditions could also lead to high inflation and further supply chain constraints.

Economists have opined that the near future could lead to lower trade with Russia along with economic sanctions on Moscow by the European Union and the United States and financial constraints could be the indirect consequences on the businesses. Such a situation is also likely to affect the consumer confidence. The above consequences could be mild or severe. One of the most dreaded situation would be a soar in the energy prices that could lead to a second recession of the global economy in three years.

Talking about the current situation, the desire for endgame by Russian president Vladimir Putin is not clear. The experts are considering a number of situations that could include a change in the government in Kyiv to an attempt to redraw the international boundaries of Europe and beyond that could be favourable for Mowcow. However, Holger Schmieding, the chief economist at Berenberg Bank said that before predicting anything, the first thing to consider is, how bad the war could get. That would be helpful to determine the possible response in financial and energy markets.

Economists have also said that a wider global response could also be crucial. Meanwhile, China has signaled that it would be ready to help Russia financially with its military actions. However, that could be an indication of its intentions to go to Taiwan or as an opportunity to improve its relations with the United States.

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