Global Economy Continues To Suffer As Russia-Ukraine Conflict Continues

Indeed, financial markets throughout the world plummeted when Russian President Vladimir Putin decided to invade Ukraine, highlighting growing fears that a lengthy conflict may devastate the worldwide economic system. Shares in IT titans Microsoft and Apple, for example, fell on news of the invasion along with global stock markets. Furthermore, Bitcoin (BTC) fell drastically when the conflict began before making a slight comeback.

Are things as bad as they seem?

Nevertheless, it&39s doubtful that the global economy would plummet to the rapid, frightening lows experienced during the COVID-19 pandemic, when markets panicked about the unexpected stoppage of global supply chains and a fatal virus for which the public lacked prophylactic immunizations at the time.

Surprisingly though, Western European nations paid Russia for gas routed from Russia via Ukraine in a bizarre turn of events, even as Russian tanks occupied Ukrainian territory and war erupted. Investors quickly decided that this would not be the case for long.

Russia&39s conflict against Ukraine prompted the price of oil to skyrocket by nearly 10%, while other markets continued to drop. Simultaneously, European natural gas futures have risen by 50%, owing to analysts&39 fears about future Gazprom exports. The consequences might be far-reaching, as the increasing price of oil, for example, may result in high gas costs for automobile owners in the United States, something which President Joe Biden recently acknowledged.

In related news, a surge of crypto donations have been flooding into Ukraine which are helping cover costs related to medicine, drones, military equipment, and other needs. An increasing number of people are looking toward crypto assets and alternative currencies as traditional banking and financial systems continue to be under threat from the Russian onslaught.

What about inflation?

Inflation has startled experts and the Biden administration by reaching levels not seen since the early 1980s when COVID vaccinations unleashed waves of economic spending which supply-chain bottlenecks have been unable to keep up with. Concurrently, detractors have said that the Biden administration simply produced too much money too quickly, and that it will take time for it to be taken out of the system.

A war in Ukraine, no matter how brief, will thus undoubtedly disrupt supply networks even further. The battle may cause inflation to surge at greater levels than we anticipated only a short while ago. This means that the costs of energy, gas, food, and other basic raw materials might become considerably greater than they are now. Additionally, if prices rise amid mounting worries of a prolonged and unpredictable conflict, customers may hoard their monetary assets rather than spend them, thereby harming the economy even more.

Ultimately, one can only hope for a swift and decisive end to the Russia-Ukraine conflict. Meanwhile, global markets will try their best to hold on as things will undoubtedly get worse before they improve.