Global Outlook: Europe feeling the effect of Russian sanctions

Article tags EconomyPoliticsUkraine crisisWorld EventsEurope

In EIU’s latest global outlook video global forecasting director, Agathe Demarais, and principal economist for Europe, Emily Mansfield, discuss the economic impact of the Russia-Ukraine conflict, specifically how European economies are starting to feel the effect of formal sanctions placed on Russia.

A number of high-frequency indicators, including truck toll mileage data and real-time ship movement data, dropped in March across European countries amid supply chain disruptions caused by the war in Ukraine. Economic sanctions placed on Russia are also driving up inflation, owing to a steep rise in energy prices.

“Euro zone inflation hit 7.5% in March – and this spike in consumer prices is going to weigh on consumer spending this year. Energy prices are the main factor behind this, with industrial goods prices up by almost 15% year on year.”

emily mansfield, principal economist for europe, EIU.

To combat this surge in costs, governments are implementing price caps, subsidies and tax cuts. The clearest example of this is France, where energy caps are keeping inflation at a lower level than in the country’s neighbours. Emily Mansfield discusses these measures in more detail and also outlines what Emmanuel Macron’s presidential win means for Europe’s economic outlook taking Russia sanctions into consideration.

Find out more about the latest political, policy and economic outlook at a global or country-level with EIU Viewpoint, our new analysis service. EIU Viewpoint provides unmatched global insights for nearly 200 countries, helping organisations identify prospective opportunities and potential risks.

Thu, 28th Apr 2022 Article tags EconomyPoliticsUkraine crisisWorld EventsEurope