The Ukrainian War In The Economic Arena – Analysis

War, as well as causing death and destruction, is harmful to economies: it destroys physical and human capital, increases uncertainty and stifles investment and consumption. But in addition to the direct economic impact of the war in Ukraine –which will bring both the Ukrainian and, owing to Western sanctions, the Russian economies to a shuddering halt– one must also mention the unclear effect of turbulence in the fuel and raw materials markets, with fallout that is still very uncertain for Europe, as well as the impact of other economic measures that may be adopted in the future if the conflict persists. All this will steer the world economy, in the best-case scenarios, towards lower growth and greater inflation; and, in the worst case scenario, to an acute stalling of growth that could turn into a recession in many European countries (and elsewhere) owing to shocks in the financial and commodity markets.






