Russia’s war in Ukraine is likely to drag on denting economic confidence and rerouting energy flows — S&P Global Ratings
“The Russia-Ukraine conflict looks likely to last longer than we expected, which will continue to dent confidence and reroute energy flows,” writes S&P Global Ratings in its recent research.
Consumer and producer confidence has taken a hit — most notably in Europe — but the analysts expect continued deterioration in confidence as the war drags on. Rerouting energy flows is an ongoing structural consequence of the war. Potential effects could also include dislocated commodities markets — notably for oil and gas — supply chain disruptions, inflationary pressures, weaker growth, and capital market volatility.
As a result of higher energy and commodity prices, a longer-than-expected Russia’s war in Ukraine, faster monetary policy normalization, and slower Chinese growth, S&P Global Ratings worsened its GDP forecasts for many countries. Now, it expects the U.S. economy to grow by 2.4% in 2022 (instead of the 3.2% expected in the March 2022 outlook) and the eurozone — by 2.7% (instead of 3.3%).