The impact of the war in Ukraine on the economy

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Russia attacked the territory of Ukraine on the night of February 24, 2022. It started a war, the consequences of which are becoming increasingly visible to both the population and the global economy. Western countries, together with the United States, initially hesitated to take action, counting on the quick capitulation of the territory attacked by the Russians. However, the resistance of the Ukrainians and the escalation of the armed conflict forced the US and the EU to impose further sanctions on Russia as the aggressor. The process of providing weapons to the defenders of the attacked territory, humanitarian aid, and accepting a huge number of war refugees has begun. The consequences of the Russian-Ukrainian war will be felt by the whole world and our wallets, so it is worth taking a closer look at them.

Accelerating economic slowdown
The war turned out to be an excellent catalyst for the economic czech republic whatsapp database that we have been observing since the fall of 2021. It accelerated the process of the coming of the bear market on stock exchanges, after a period of prosperity and printing money by central banks. Western countries froze Russia's currency reserves as part of the sanctions. They blocked the SWIFT interbank settlement system for major Russian banks. Some corporations stopped investing in the Russian Federation and conducting business there. VISA and MasterCard card operators joined in the further restrictions, suspending cashless payments on the territory of Russia. However, the country had been preparing for possible problems for many years, selling Western bonds and buying gold instead.

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Financial turmoil
The subsequent sanctions caused waves of declines on stock exchanges, especially in Europe among countries economically linked to Russia and Ukraine. The Russian ruble, Ukrainian hryvnia and currencies of neighboring countries, including the Polish złoty, weakened very strongly. The stock exchange in Russia was closed immediately after the outbreak of hostilities, after a huge 45% drop in one day. The capital of foreign investors in companies listed there was frozen. The Russian Federation was cut off from part of its currency reserves held in Western countries. As well as from financing in local banks and other financial entities.

Rising prices of raw materials and food
The war has disrupted the supply chains of raw materials for many companies. Infrastructure has been destroyed, and economic sanctions have interrupted trade with Russia for many international corporations. The prices of oil, gas, wheat and other raw materials and products, of which Russia and Ukraine are major exporters, have skyrocketed. The weakening of the currencies of many countries against the dollar has caused inflation to spike again, including in Poland. The invading army has also destroyed agricultural equipment and infrastructure in Ukraine, making it difficult and impossible to carry out early grain sowing.
Very large increases in the prices of fertilizers and fuels are further "bricks" that will translate into higher prices of food products in the coming months. It drains our wallets and limits the purchasing power of earnings.

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Higher transport and heating costs
The Polish government has announced that it will stop importing Russian hydrocarbons after the current contracts expire. Such large quantities of oil, gas and coal cannot be replenished from other sources in a short time. Therefore, shortages may appear on the market and prices may continue to rise. The insane climate policy of the European Union has led to the closure of many mines. Therefore, a significant portion of coal for steel melting, energy production and heating will have to be imported from abroad.

Geopolitical changes
Russia, during the war and after it, will still suffer the consequences of its actions for a long time. Restrictions on economic exchange with Western countries mean taking the direction to the East. In the coming years, cooperation between the Russian Federation and China will tighten. Where a large part of the exported raw materials, mainly oil, gas and wheat, can go. Russia has so far covered as much as 40% of the annual demand of the European Union countries for gas and oil.
Changes may mean the emergence of two main groups of powers. The United States with the countries of Europe and an eastern counterweight with China, Russia and perhaps India, Indonesia.