Russia’s attack on Ukraine and retaliatory sanctions from the West may not augur another global recession. The two countries together account for less than 2% of the world’s gross domestic product. And many regional economies remain in solid shape, having rebounded swiftly from the pandemic recession.
Russia is the world’s third-biggest producer of petroleum and is a major exporter of natural gas. Ukraine’s farms feed millions around the world. And financial markets are in a precarious spot as central banks prepare to reverse years of easy-money policies and raise interest rates to fight a resurgence of inflation. Those higher rates will likely slow spending and raise the risk of another downturn.
“I wouldn’t be misled by just calculating GDP ratios … especially at a time when commodity prices are already high, inflation is already high,” said Elina Ribakova, deputy chief economist at the Institute of International Finance,…
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