Commenting on the Russia-Ukraine crisis, Gargi Rao, Economic Research Analyst at GlobalData, a leading data and analytics company, offers her view:

“If the US and its allies impose more rigorous sanctions on Russia, the Russian government’s ability to access financial markets will be hindered. Severe disruptions in trade, investment, and oil production and supply are on the cards, all alongside a blow to consumer sentiment. Against this backdrop, GlobalData forecasts that Russia’s economic growth will slow down from 4.6% in 2021 to 2.6% in 2022.

“The price of Brent crude oil jumped to $103.1 per barrel on February 24, 2022. With Russia being a top producer of natural gas, wholesale gas prices could continue to climb, which will further threaten heating bills and could have a knock-on effect on the prices of goods. Germany’s decision to halt the gas pipeline project connecting to Russia will likely push up gas prices in the EU.

“As Russia is highly dependent on the US for imports of food and other products, the exchange rate between the Ruble and the US dollar could have a significant impact on the price of goods in Russia. GlobalData expects the Ruble-$ exchange rate to depreciate from 73.6 Ruble/$ in 2021 to 75.7 Ruble/$ in 2022, with the US and allies vowing severe sanctions. Business and consumer sentiments will remain subdued, and prices are expected to remain at elevated levels in the coming months.

“With a weakening currency, Ukraine’s financial conditions have become tight and economic losses are expected to climb even further.”