Armed conflict could exacerbate supply chain disruptions and drive food, gas and other prices higher.
Fears of an armed conflict in Ukraine after Russia ordered troops into separatist territories pose a new threat to a global economy that has been struggling to emerge from the coronavirus pandemic and coping with record levels of inflation, analysts warned on Tuesday. European countries and the United States are rolling out sanctions in response to the Kremlin’s actions, most of which are expected to target Russian banks and oligarchs. But they are expected to roil energy markets and fuel additional commodity price increases. The uncertainty follows a year of supply chain obstructions that have disrupted the flow of commerce around the world. “Should the Russian incursion into eastern Ukraine turn into a full-fledged invasion, it is likely that the global and U.S. economies will absorb yet another supply shock,” Joseph Brusuelas, chief economist at the audit and tax firm RSM US.
