Economy

Published: Jan 17, 2023
Updated: Jan 17, 2023

Rising Tensions: Russia-Ukraine War on the Verge of Escalation- Trouble Ahead for Global Economy

The ongoing Russia-Ukraine war is on the brink of escalating into a major conflict in the coming months, with dire implications for the geopolitical scenario and markets around the world.

Russian Mobilization: A Threat to Markets

According to intelligence reports from western countries, Russia is planning a general mobilization soon, with the aim of expanding its army to a force of 200,0000. This move could spell trouble for Russian markets, as it would likely lead to increased military spending and a strain on the country's already struggling economy.

Ukrainian Support: Western Nations Step Up Arms Supply

The situation in Ukraine is also becoming increasingly volatile, with the country receiving increasing support from western nations in the form of weapons and tanks. The United Kingdom has recently supplied Ukraine with deadly missiles, while Germany has provided them with Leopard tanks. This support is only expected to increase in the coming days and weeks.

Miscalculation Could Trigger NATO Article 4 and 5

The situation is particularly concerning as one miscalculation or missile attack by Russia on a NATO country could trigger Article 4 and 5 of the NATO treaty, which could lead to a full-scale war. The implications of such a war for the global economy and peace would be catastrophic.

Economic Implications of Escalation: A Global Concern amid Recession fears

In the event of a war escalation in 2023, we can expect to see a sharp decline in global stock markets, a drop in oil and gas prices, and a decrease in the value of the ruble. Businesses would also be negatively affected, with many companies likely to see a decrease in profits and an increase in operational costs. Additionally, there would be a significant rise in the cost of raw materials and goods, leading to inflation and unemployment.